IT industry set for global spending boost

IDC claims growth will accelerate next year as smartphones and economic recovery drive sales boom

Global IT spending growth is set to surpass the five per cent annual mark next year as key regions' economies show signs of recovery and sales of smartphones continue to rocket.

In 2014, IDC expects global IT spending to grow five per cent year-on-year to reach $2.14tn (£1.33tn). This year is on course to post a growth rate of just four per cent annually – the slowest pace of growth since the financial crisis. This year, global spending on IT is expected to hit $2.04tn.

According to the analyst's Worldwide Black Book research, this year's growth was driven by smartphones which, together with tablet shipments, account for almost half of 2013's industry growth so far.

Without sales of mobile phones, 2013's global IT spend would only reach 2.6 per cent annual growth, IDC said. This year's slower growth rate was also attributed to tepid enterprise IT spending across the board as well as weaker-than-expected sales of PCs, servers and storage.

"This has been a tough year for many IT vendors, with infrastructure spending in the first half of 2013 proving weaker than previously expected," said Stephen Minton, vice president of IDC's Global Technology and Industry Research Organisation.

"The overall industry has been propped up by continued strength in mobile devices, especially smartphones, but the slowdown in emerging markets was another headwind for infrastructure-focused tech firms on top of government sequestration in the US and continued sluggish growth in Europe."

But next year IDC said that the global economy will become healthier, which will have a positive impact on worldwide IT spending.

In western Europe, IT spending growth will reach three per cent in 2014 – up from a forecasted two per cent this year – driven mainly by strong commercial software sales and the improving economies of countries in the region.

"Momentum in developed economies has been broadly positive since the start of 2013," added Minton. "The gradual turnaround in Europe is restoring business confidence, leading to a strengthening of our assumption that next year will be better than this year for most IT vendors."

Increasing Chinese demand for IT will also boost spending next year after this year the country's growth rate of eight per cent was the weakest figure since 2008.

IDC expects strengthening sales of PCs, servers, storage, IT services and software to boost Chinese annual IT spending growth rate to 14 per cent – the highest rate of any of the regions IDC covers as part of the research.