Driven by growth in software and IT services revenue, worldwide IT spending is forecast to reach $3.5 trillion in 2017, up 2.9 per cent from 2016 estimated spending of $3.4 trillion, according to the latest forecast by Gartner.
One particular highlight for the IT industry has been software and IT services. Software spending is projected to grow 6 per cent in 2016, and another 7.2 per cent in 2017 to a total of $357 billion. IT services spending is set to grow 3.9 per cent in 2016 to reach $597 billion, increasing 4.8 per cent in 2017 to reach $943 billion.
John-David Lovelock, research vice president at Gartner, said: "The immediate impact of Brexit has caused modest growth in IT spending to turn negative for 2016. Without the UK, global IT spending growth would have been modestly positive at 0.2 per cent in 2016, but with the UK included, IT spending is expected to decrease 0.3 per cent. The immediate impact of the British pound will also cause the IT spending patterns to shift as prices for IT will increase."
Companies will be following Brexit negotions closely, and analysts predict that there will be some changes in IT investment as a result.
Lovelock said: "We see software and IT services spending in Germany and France increasing, while U.K. services stay relatively flat. There are other countries, such as the Netherlands, Luxembourg and Ireland that are also increasing their IT spend to contend as a viable alternative to banks in the U.K. We are seeing examples of many banks in talks with these countries to examine the possibility of moving their operations outside of the U.K."
In addition, Gartner does not predict the upcoming US presidential election will largely effect IT spending.
"We have also taken into account the US presidential race, as well as a potential rate cut by the Federal Reserve. Typically, there is a slight pause in IT spending leading into the election, and then a relief in spending, subsequently. However, trends have shown that IT spending in the US is not dependent on presidential leadership, so neither candidate should have a significant impact on IT spending in the near-term."