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Another Quarter, Another Forecast Update, Yet More Currency Effects

by Richard Gordon  |  April 5, 2012  |  Comments Off on Another Quarter, Another Forecast Update, Yet More Currency Effects

The headlines will say “Gartner Cuts IT Spending Forecast for 2012” but yet again this quarter our forecast update is a tale of two growth rates: the current dollar one and the constant dollar one.

In our 1Q12 update, worldwide IT spending is forecast to total $3.7 trillion in 2012, a 2.5 percent increase from 2011, which is down from our previous forecast of 3.7 percent growth for this year.

However, the reduction in growth rate has more to do with the recent strength in the U.S. currency than an actual decline in spending. When looking at spending in constant U.S. dollars (i.e. stripping out the effect of exchange rate movements) we project that IT spending is on pace to increase 5.2 percent in 2012, up from its previous projection of 4.6 percent.

What we’re seeing this quarter, as we look forward to 2012, is a bit more stability in the global economic and IT industry environment; the eurozone crisis has abated somewhat, fears about the Chinese real estate bubble have waned and the HDD shortage, while serious, has not caused significant disruption to hardware system spending.

So, the global macroeconomic picture looks a little brighter, as reflected on Wall Street, which is feeding through to more confidence among consumer and enterprises to spend on IT products and services. The one area we see as a growth laggard is the government sector – in fact, we expect global IT spending by governments to contract slightly in 2012 and 2013 as the impact of spending cuts in Western Europe  and the USA feed through to the front line.

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Richard Gordon
Research VP
14 years at Gartner
23 years IT industry

Richard Gordon is a research vice president in Gartner Research. He has worldwide responsibility for Gartner's Global IT Market Forecasting. Read Full Bio

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