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Gartner UK Ltd

Gartner Says Worldwide Vertical Market IT Spending Will Be Flat in 2009

(PresseBox) (Stamford, Conn., )
Worldwide vertical market IT spending is projected to total $2.7 trillion in 2009, a 0.5 per cent increase from 2008, according to Gartner, Inc. Utilities, healthcare and government are expected to be the strongest-growing segments of the market in 2009.

"The economic slowdown triggered by the US subprime market crisis, along with fluctuating oil prices and currency exchange rates impacted many industries and countries around the world in IT spending," said John-David Lovelock, research vice president for Gartner. "Internal spending, hardware and system integration in the financial sector were particularly hard-hit in 2008 and will continue suffering through 2009. In contrast, healthcare grew 8.3 per cent worldwide in 2008, and utilities grew 7.7 per cent."

The utilities industry is forecast to grow the most in 2009 with 2.9 per cent growth. Smart grids and energy supplies are viewed as national and strategic issues in many countries, and spending on IT is a necessity. The healthcare industry is expected to post the second-highest increase in 2009 with 2.2 per cent growth. Countries in which healthcare is primarily publicly funded will be sheltered from the worst of the economic turmoil, and governments tend to keep healthcare funding at least stable during the worst economic conditions.

Uncertainty about the depth and duration of the economic slowdown dominated the banking and investment sector in the last quarter of 2008. This uncertainty led to declines and postponements in IT spending at many large financial services companies, and this is expected to continue in 2009 as worldwide financial services IT spending is forecast to decline 0.7 per cent (see Table 1). The US financial services sector is forecast to be hardest hit, however, major IT investments in less-affected countries such as Canada and Mexico and regions such as the Middle East and Africa will minimise the decline in the sector worldwide.

Vertical-market IT spending in the United States in 2009 is projected to grow 0.1 per cent. Healthcare is expected to be the strongest performer in 2009 with 2.6 per cent growth. Financial services is projected to be the weakest with a 2.2 per cent decline from 2008 spending. Spending in Europe, the Middle East and Africa in 2009 is expected to decline 0.3 per cent with utilities showing the strongest growth and services posting the weakest.

Latin America and Asia/Pacific vertical market IT spending are forecast to grow 4.4 per cent and 2.9 per cent, respectively. Latin America's growth is spurred by continued IT expansion in Brazil, Peru, Argentina and Chile, while in Asia/Pacific, countries such as India and China will continue to spend on third-generation and next-generation infrastructures. Japan will continue to struggle in 2009 with IT spending forecast to decline 0.1 per cent.

"The slowdown in economic output (revenue) growth will continue to have a significant, but uneven, impact on IT spending across industries and within industries, as companies continue to adjust cost structures to preserve earnings. Technology service providers that go to market aware of and aligned to industry subsectors needs will perform best," said Mr Lovelock.

Additional information is available in the report "Dataquest Alert: Utilities, Healthcare and Government Lead IT Spending Growth in Challenging 2009." This report is available on Gartner's website at http://www.gartner.com/....

Gartner UK Ltd

Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,000 associates, including 1,200 research analysts and consultants in 80 countries. For more information, visit www.gartner.com.

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