Worldwide IT spending on hardware, software and services is set to grow just 2 percent in constant currency terms to USD 2.3 trillion in 2016 due to the ongoing weakness of emerging economies and market saturation, according to a report from the International Data Corporation (IDC). The figure contrasts with annual growth of 5-6 percent in constant currency terms since the recovery from the financial crisis in 2010. Including telecom services, the report predicted that total ICT spending will likewise increase by 2 percent, to USD 3.8 trillion.
In spite of the volatile nature of the global economy, IT spending remained relatively stable last year, thanks to another strong year for smartphone shipments, which accounted for half of the overall industry growth rate of 6 percent in 2015. Spending on cloud infrastructure was also strong throughout the year, resulting in growth of 16 percent for the server market and 10 percent for storage systems, said IDC.
Although the strong growth in smartphones and cloud infrastructure helped Chinese IT spending increase by 11 percent last year, IDC predicts a significant slowdown in 2016, with the overall IT spend posting its first-ever decline (at around -0.3 percent). According to the report, the expected decline in smartphone sales is more closely related to market maturity than economic weakness, but PC sales are also set to decline, with growth of spending on servers, storage and peripherals set to soften compared to last year.
The report also predicts that Asia/Pacific will post growth of less than 2 percent in 2016, compared to 7 percent in 2015, largely due to the overall slowdown in China, while Western Europe will post growth of 1 percent (down from 5 percent in 2015) due to the increased maturity of the smartphone market and a deceleration from the double-digit growth of spending on infrastructure last year.
In contrast with other regions, IT spending in the US is set to remain broadly stable this year, said the report, with the market forecast to increase by 4 percent for the fourth consecutive year in spite of an expected decline in the PC market and weakening growth in servers and storage. The "new normal" of 4 percent annual growth in IT spending is likely to continue in 2017, said IDC, assuming there are no significant disruptions to the broader US economy.
