UK IT distribution market weakens amid global uncertainties - CONTEXT

A sharp decline in the networking segment dragged results down

The UK was among the 14 countries whose IT distribution market fell below the performance index in Q2, according to market intelligence firm CONTEXT.

Results across Europe reflected mixed performance trends, as markets including Germany, Italy, and Spain also reported lower than expected figures.

In contrast, France’s IT distie market remained steady, while Poland and the Nordics outperformed both 2023 and last year’s levels.

After a 5.9 per cent year-on-year growth in Q1, Poland’s market went up 16.5 per cent in April.

The weakening of the US dollar, as well as potential tariff increases on European metals and administrative turbulence in US tariff policy have led to short-term shifts in product flow and pricing.

The networking segment saw a significant drop compared to last year, with datacentre networking security being a particular area of concern.

On a more positive note, virtualisation and security software recorded strong performance gains.

Desktop sales also surged, driven by the approaching end-of-life for Windows 10 and the demand for AI-capable PCs.

Graphics cards and processors, particularly for gaming, also contributed to the hardware momentum.

“The market is showing remarkable resilience in a complex macro environment,” said Anthony Frot, research director at CONTEXT.

“Ongoing geopolitical pressures, particularly related to US-EU tariffs and currency shifts, are clearly creating volatility.

“However, across Europe, the sustained growth in software and AI-aligned hardware categories points to a broader modernisation trend in enterprise IT.”

CONTEXT expects for the IT distribution market to see a strong uptick in desktop and a moderate growth in mobile sales for the rest of the year.

Full-year forecasts suggest an 11.8 per cent year-on-year upward evolution in desktop unit sales and an 11.7 per cent rise in revenues.

Mobile PCs, including notebooks and tablets, are set to grow by 6.2 per cent in units and eight per cent in revenues.

These results align with CONTEXT’s previous figures, as the firm reported positive momentum for PC desktops in the early Q2.