Europe remains in IT spending slump, analysts say

Europe remains in IT spending slump, analysts say

Forrester and Gartner see little growth this year

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There will be growth in total worldwide IT spending this year say analysts as countries head out of recession, but most western and central European countries will see overall spending decline, continuing the trend from 2012.

According to analyst Forrester the global IT market will grow 3.3 percent this year when measured in US dollars, but there will be continued recession in Europe and slower growth in Japan and India.

Forrester said the strong US dollar is depressing growth rates when measured in dollars and that growth when measured in local currencies showed that actual total growth would be 5.4 percent in 2013.

The Forrester growth figures are similar to those from rival analyst house Gartner, which says worldwide IT spending is expected to reach $3.7 trillion in 2013, a 4.2 percent increase from 2012 spending of $3.6 trillion.

Gartner analysts said much of this spending increase is the result from projected gains in the value of foreign currencies versus the dollar. When measured in constant dollars, 2013 spending growth is forecast to be 3.9 percent.

When drilling down into the regions Forrester said European firms will cut IT buying in 2013, while tech spending will grow 7.5 percent in the US. The Latin America, Eastern Europe, the Middle East, and Africa regions will see 9 percent growth, and the Asia Pacific 4 percent growth.

Andrew Bartels, a Forrester analyst, said, "The European tech market will remain depressed for most of 2013 before starting to improve as 2014 nears."

Bartels said, "The UK, Italy, Spain and the Netherlands all had negative growth in 2012. In 2013 Italy and Spain will continue to decline; France, Germany and the Netherlands will barely grow; but the Nordics, Switzerland and the UK will see better growth."

When measured in local currencies the total European market will actually rise 0.8 percent in 2013. In dollars it will slump by 3.2 percent.

Richard Gordon, an analyst at Gartner, said, "Uncertainties surrounding prospects for an upturn in global economic growth are the major retardants to IT growth. However much of this uncertainty is nearing resolution, and as it does we are looking for accelerated spending growth in 2013 when compared to 2012."

Gartner says worldwide enterprise software spending is forecast to total $296 billion in 2013, a 6.4 percent increase from 2012. This segment will be driven by key markets such as security, storage management and customer relationship management.

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