Worldwide IT Spending to Grow 3% in 2010

Worldwide spending on information technologies will continue to feel the effects of the global recession throughout 2010. According to a new forecast from IDC, worldwide IT spending will increase by just 3% in 2010 at constant currency. In the United States, IT spending is forecast to increase by less than 3%.

Overall, IDC forecasts that worldwide IT spending will reach $1.48 trillion in 2010, still below the $1.5 trillion recorded in 2008. IDC's forecast of 3% growth in worldwide IT spending is at constant currency, and does not assume future fluctuations in the value of the U.S. dollar or other international currencies over the next 12 months. If the U.S. dollar weakens in 2010, the actual recorded growth of IT spending in US$ may be significantly higher. Measured in U.S. dollars, worldwide IT spending declined by 8% in 2009 due to the stronger value of the dollar compared to 2008.

On a global basis, IDC expects hardware spending to grow by 5% in 2010, while software spending and IT services spending will grow by 2% and 3%, respectively, in constant currency. In the hardware segment, worldwide PC spending is forecast to increase by 3% this year, up from the previous forecast of 2% growth, while the forecast for servers, storage, hardcopy peripherals, and network equipment have also been raised. The outlook for software and services spending reflects the lower value of contracts signed in the past year and continued caution toward new project-based spending in mature economies.

Regional highlights from IDC's new forecast include the following:

-- Asia/Pacific: Overall, the region will experience 6% growth in IT spending in constant currency, following a 1% decline in 2009. However, China and India are both expected to experience double-digit growth (11.5% and 13.5%, respectively) this year. Hardware spending will experience solid gains this year, driven by pent-up demand and new infrastructure deployment. Following a decline of 8% last year, no IT spending growth is forecast for Japan this year.

-- EMEA: Following a worst-ever decline of 7% in 2009 at constant currency, IT spending in Western Europe is forecast to be effectively flat in 2010. A few market segments are expected to return to positive growth, but the market sentiment across the region remains weak. In Central and Eastern Europe, the 20% spending crash of 2009 will be followed by 9% growth in 2010. IT spending in the Middle East and Africa will also return to growth this year (12% at constant currency) after a 2.5% decline last year.

--Latin America: IT spending in Latin America will be up by 5% this year. Overall spending will gradually accelerate in line with the recovery in business and consumer confidence. Increasing market maturity in some sectors will contribute to price competition as some buyers gravitate towards low-cost solutions. The key market of Brazil will return to a more robust level of growth by 2011.

--North America: The gradual economic recovery will enable many U.S. organizations to relieve some of the pent-up demand for system and network upgrades following last year's spending.

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