IT spending forecast to grow 5%

Worldwide IT spending is forecast to total US$3.6 trillion in 2011, a 5.1% increase from 2010, according to the latest outlook by Gartner.

In 2010, worldwide IT spending was US$3.4 trillion, up 5.4% from 2009 levels.

Gartner has raised its outlook for 2011 global IT spending from its previous forecast of 3.5% growth. In 2010, the IT industry performed better than Gartner's forecast of 3.2% growth.

Analysts said currency exchange rate fluctuations have continued to affect the US dollar-denominated forecast. Of the 2.2% point increase in IT spending growth in 2010, 1.6% is attributable to the recent devaluation of the US dollar against other currencies.

"Aided by favorable US dollar exchange rates, global IT spending growth is expected to exceed 5% in 2010, but a similar level of growth in 2011 - while forecast - is far from certain, given continued macroeconomic uncertainty," said Richard Gordon, research vice president at Gartner.

"While the global economic situation is improving, the recovery is slow and hampered by a sluggish growth outlook in the important mature economies of the US and Western Europe. There are also growing concerns about the ability of key emerging economies to sustain relatively high growth rates.

"Nevertheless, as well as a fundamental enabler of cost reduction and cost optimisation, investment in IT is seen increasingly as an important element in business growth strategies. As the global economy repairs itself in coming years, we are optimistic about continued healthy spending on IT."

The telecom equipment market is poised for the strongest growth in 2011, with worldwide telecom equipment spending forecast to grow 9.1%.

Strong sales of mobile devices in the third quarter of 2010, driven by smartphones in mature markets and white box devices in emerging markets, as well as stronger local currencies, resulted in an upward revision of Gartner's forecast.

The computing hardware segment is forecast to grow 7.5% in 2011, but Gartner analysts said vendors face possible challenges, particularly in the area of PC growth, given likely weak economic growth through the first half of 2011.