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Gartner: global IT spending to experience highest growth since 2007

10 Apr 2018

Worldwide IT spending is projected to total US$3.7 trillion in 2018, an increase of 6.2% from 2017, according to the latest forecast by Gartner.

This is the highest annual growth margin the analyst has predicted since 2007, although it says drops in the U.S. currency are largely to blame for the spike. 

Gartner research vice-president John David Lovelock says, "Although global IT spending is forecast to grow 6.2% this year, the declining U.S. dollar has caused currency tailwinds, which are the main reason for this strong growth.

"This is the highest annual growth rate that Gartner has forecast since 2007 and would be a sign of a new cycle of IT growth. However, spending on IT around the world is growing at expected levels and is in line with expected global economic growth.

“Through 2018 and 2019, the U.S. dollar is expected to trend stronger while enduring tremendous volatility due to the uncertain political environment, the North American Free Trade Agreement renegotiation and the potential for trade wars,” Locklock continues. 

Looking towards A/NZ, Australian tech spending is forecast to grow 2.3% to reach A$84.5 billion in 2018 while New Zealand spending on technology products and services is forecast to grow 2% to reach almost NZ$12 billion in 2018.

IT Services is forecast to remain as the largest segment in Australia in 2018, with $30.45 billion (up from $29.8 billion in 2017), while in New Zealand, the largest segment for 2018 is forecast to be Communications Services with $4.4 billion (up from 4.4 billion in 2017).

Regarding the global figures, Gartner says enterprise software spending is forecast to experience the highest growth in 2018 with an 11.1% increase while the software industry - barring unexpected disruption - is expected to continue capitalising on the evolution of digital business.

Application software spending is also expected to continue to rise through 2019, and infrastructure software will also continue to grow, bolstered by modernisation initiatives.

Even with a strong end to 2017, worldwide spending on data centre systems is forecast to grow 3.7% in 2018, down from 6.3% growth in 2017. 

The longer-term outlook continues to have challenges, particularly for the storage segment as Gartner says the strength at the end of 2017 was primarily driven by the component shortage for memory components, and prices have increased at a greater rate than previously expected. 

Previously, Gartner expected component shortages to ease into 2018. However, the shortages are now expected to continue throughout the year with the supply not expected to ease until the end of the year.

Worldwide spending for devices — PCs, tablets and mobile phones — is forecast to grow in 2018, reaching $706 billion, an increase of 6.6% from 2017.

This follows the analyst’s forecast that device shipments are also expected to return to growth in 2018.  

Lovelock adds, "the device market continues to see dual dynamics. Some users are holding back from buying, and those that are buying are doing so, on average, at higher price points.

"As a result, end-user spending will increase faster than units through 2022. However, total end-user spending and unit shipments are expected to be lower compared with previous forecasts, as demand for ultramobile premium devices, ultramobile utility devices and basic phones is expected to be slow."

Gartner says its IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services.

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