Gartner lowers IT spending growth forecast to 2.5%

Worldwide IT spending is forecast to total $3.7 trillion in 2012, an increase of 2.5% from the previous calendar year, according to the outlook by technology researcher Gartner.

However, this is lower than its previous forecast of 3.7% growth for 2012.

Gartner analysts said the lower growth rate has more to do with the US currency than an actual decline in spending. The recent strengthening in the value of the US dollar against other currencies has resulted in the reduced growth rate.

However, when looking at spending in constant us dollar, the analysts said IT spending is on pace to increase 5.2% in 2012, up from its previous projection of 4.6%.

Gartner said IT spending in the government sector is expected to contract moderately on a global basis in 2012 and 2013, driven by austerity measures in the Eurozone.

While there has been much commentary about the need for government cuts since the sovereign debt crisis emerged in Europe, it is only now that the impact of government budget cutbacks is being felt on IT spending in the region, it said.

"Similarly, we expect US government spending to be essentially flat in 2012 before contracting in 2013," Gartner added.

In the small and midsize business market, which represents approximately a quarter of all enterprise IT spending, spending is forecast to reach $874 billion in 2012 and will grow to $one trillion by 2016.

The worldwide telecom equipment market is forecast to show the strongest growth with spending reaching $472 billion in 2012, a 6.9% increase from 2011.

Gartner attributes this growth to the continued health of the mobile devices market as well as a more positive outlook for enterprise network equipment, which is being driven by spending on application acceleration equipment, network security, WLAN and Ethernet switches.