But, Europe and Japan seem to be the weak spots
Worldwide IT spending has rebounded strongly from recession with many firms taking advantage of general economic recovery to catch up with overdue spending on critical hardware infrastructure, according to new data from market research firm IDC.
The firm said that capital spending on PCs, servers, storage and network equipment increased in the recent quarters, producing strong year-over-year growth comparisons with the lowest period of the recession. Consumer spending on smartphones also continued to accelerate.
According to the forecast, global IT spending is set to increase by 3.8% this year at constant currency to $1.47 trillion, with hardware taking the lead accounting for a growth of 6.4%. Software and services spending is expected to increase by 3.1% and 1.5%, respectively.
In a move to support export-driven growth, businesses in emerging markets like China and India are rushing towards investing in new technology products and services. The US market is seeing strong shipments of IT equipment, boosted by government stimulus funding and currency fluctuation in the first quarter of 2010.
Western Europe seems to a weak spot with current debt crisis in Greece raising concerns over the short-term prospects for the European Union. IT spending in Western Europe is expected to be flat this year in constant currency, after plunging by 6.5% in 2009 (a decline of 13.5% in U.S. Dollars), according to IDC.
IT market is expected to increase by 13.7% in China and 13.8% in India, while IT spending in Japan is expected to decline by 2.2% this year in constant currency, after plunging by 11.1% in 2009. Worldwide IT spending is forecast to grow by 5.5% in 2011, assuming a gradual recovery in Europe and Japan.
Stephen Minton, vice president of Worldwide IT Markets and Strategies at IDC, said: IT spending growth in the US and emerging markets has been strong during the past two quarters. Some of this is down to easy comparisons with the same period a year ago, but it also reflects very real pent-up demand for infrastructure spending, including investment in solutions such as virtualisation and information management.
There is still some caution in the market. Some businesses are wary about the sustainability of the economic recovery, and are holding off on some project-based spending and large, multi-year contracts. There is undoubted relief that capital spending and general IT budgets are up, but it’s also clear that some weak spots persist.