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Spending in Europe on IT services for the rest of this year will no longer see marginal growth but will decline, as all economies suffered a nasty jolt in the last three months. Researchers at IDC said they were downgrading their IT spending forecast, again, after GDP growth for Western Europe fell from -2.5% in March to -4.0% currently. Blaming the “deteriorating economic climate,” they said the European IT services market in 2009 would miss projected growth of 0.6%, and actually shrink by 0.6%. However, the latest GDP figures support the view of a depressed but stabilising economic environment, and the “uncertainty of the forecast is therefore declining.” IDC added that, as a result, there should be a slow recovery in IT budgets to start in 2010, with growth of 1.3% predicted, and growth of 3.2% between 2009 and 2013. Yet for now, the firm said the economic crisis has created a “natural break point” for many organisations to put major IT investment decisions on hold, while they review. This ‘wait and see’ attitude, a direct result of the tough economic conditions, was prevalent in all 16 Western European nations, noticeably Ireland and the Netherlands. Laura Converso, of IDC Europe Software and Services research, reflected: “Companies are rethinking their top priorities, looking at projects that will provide an immediate return on investment, deferring large new IT projects, and turning to outsourcing to lower their cost structures.” A dip in spending of 3.0% in project-oriented activities was predicted for 2009, coinciding with smaller budgets for support, and a 10% decline in investment in IT training. Despite this, organisations were said to be continuing investment in projects that help tackle their “key pain points” in areas such as customer retention, supply chain optimisation, and M&A integration. Jun 17, 2009 Email this article Printer friendly page Previous Page
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