Worldwide IT spending between 2001 and 2003 could be US$150 billion lower than earlier forecasts if the U.S. economic slowdown spreads to Europe, according to market analyst International Data Corp. (IDC).
That scenario is becoming more likely as new economic data points to a more severe economic downturn in Western Europe, IDC said. This could lead to $50 billion less in demand for IT products and services from European customers, adding to the expected $100 billion [B] shortfall in the rest of the world.
IDC currently predicts 11 per cent growth for the European IT market this year. But if the worst economic predictions turn out to be true, that growth may drop to as low as 7.9 per cent, IDC said.
The slowdown could continue into 2002 and even 2003 as Europe tries to maintain growth while controlling inflation. Germany and Italy are the most vulnerable countries in this regard, with the United Kingdom expected to be more stable, according to IDC.
Sales of PCs and networking equipment in Europe have already slowed, but software and services are still expected to show strong growth, according to Simon Minton, manager of IDC’s Global IT Economic Outlook research program and the European IT Markets Center.
Recent events in the United States have shown that technology spending is not immune to economic slowdown, and it is important for suppliers of IT products and services to the European market to understand the broader economic issues, Minton said.
IDC is a subsidiary of International Data Group Inc., the parent company of IDG News Service.
IDC, in Canada, can be reached at http://www.idc.ca.
