Brexit, trade wars flatten global IT spending

July 12, 2019 9:00 am1 comment
Brexit

Brexit

by SAVIOUS KWINIKA
JOHANNESBURG – WORLDWIDE spending on information technology (IT) is projected to be marginal this year on the back of anxiety around Britain’s withdrawal from the European Union (EU) and ongoing trade spats between rival economies, mainly China and the United States.

This is according to Gartner, the research and advisory company, which forecast total IT spending to reach $3,74 trillion in 2019, an increase of 0,6 percent from 2018 and slightly down from the previous quarter’s forecast of 1,1 percent growth.

“Despite uncertainty fuelled by recession rumours, Brexit, trade wars and tariffs, we expect IT spending to remain flat in 2019,” said John-David Lovelock, research vice president at Gartner.

He said while there was great variation in growth rates at the country level, virtually all countries tracked by Gartner would see growth in 2019.

Despite the ongoing tariff war, North America IT spending is forecast to grow 3,7 percent in 2019 and IT spending in China is expected to grow 2,8 percent.

The two economies-the biggest in the world-are involved in a tariff spat.

Lovelock said although an economic downturn was unlikely scenario for either 2019 or 2020, the risk was currently high enough to warrant preparation and planning.

“Technology general managers and product managers should plan out product mix and operational models that will optimally position product portfolios in a downturn should one occur,” said Mr Lovelock.

The enterprise software market will experience the strongest growth in 2019, reaching $457 billion, up 9 percent from $419 billion.

Globally, consumer spending as a percentage of total spend is dropping every year in every region due to saturation and commoditisation, especially with PC, laptops and tablet devices.

According to Gartner, there are hardly any ‘new’ buyers in the devices market, meaning that the market is now being driven by replacements and upgrades.

“Add in their extended lifetimes along with the introduction of smart home technologies and IoT, and consumer technology spending only continues to drop,” Lovelock said.

– CAJ News

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