The industry is split over IT spending growth predictions, and remains only "cautiously optimistic" about 2005 after emerging from a dreadful fiscal 2003, according to industry research.
The National Computing Centre (NCC) will publish the results of a survey, Benchmark of IT Spend 2004, this month that will show a fall in the number of organisations expecting IT spending to rise. Just 53 per cent forecast an increase, while 39 per cent expect a decrease.
Yet the average forecast in IT spending growth for next year was 1.9 per cent, suggesting that customers increasing IT budgets may be fewer, but they will spend disproportionately more.
NCC predicted fiscal 2003 spending would rise by 1.4 per cent, but the actual figure was one per cent.
Ian Jones, head of publishing at the NCC, said: "Last year, along with the economy, spending was fairly flat. This year, there's some cautious optimism. Average spending per user is normally about £3,000, and that's fairly typical this year."
Richard Doyle, managing director of Esteem Systems, said the VAR's business declined by six per cent in 2003 for the first time in the firm's 20-year history. In 2004 it recovered by eight per cent year on year, and in 2005 it is forecast to rise by another 10 per cent.
"The landscape is much more favourable for people to invest. Business people feel more confident," he said.
Simon Taylor, finance director at Reading-based reseller Sol-Tec, said: "Things are tough but improving. Last year was the worst since 1999. It caught us a little by surprise."
He added that profits were down by half in fiscal 2003 because of vendors pushing more business direct and business focusing more on services. However, he predicted an eight per cent boost in profit and revenue next year, produced by asset management services.
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