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IT spending in Ireland is set to grow by over four percent this year, according to IDC, as it predicts a hike in investment in technology across Europe.
Stephen Minton, director of IDC's European IT Markets Centre, told ElectricNews.Net that spend on IT in Ireland will be up by 4.5 percent in 2002 and is set to have a growth rate of 8.2 percent by 2003. This compares with a growth rate of 0.3 percent in 2001.
However, it will not be until 2004 that Ireland comes close to its previous peak. Minton predicted that growth in two years time will be 12 percent, which is just one percentage point shy of the 13 percent achieved in 2000.
"Ireland has had a roller-coaster ride in the last few years with massive growth and then a massive fall," commented Minton. "Its very fast growth rate in 2000 means that it will be another couple of years before it gets close to that level again."
Overall, IDC's monthly-updated index of technology expenditure across Western Europe has shown an increase in IT spend of 0.2 percent from 6.4 percent in January to 6.6 percent in February. This compares with five percent growth during 2001 and IDC is now predicting that growth will accelerate to nine percent in 2003.
Minton said that data from end-users, vendors and economists had led IDC to believe that there will be a significant rise in demand for technology during 2002 and that the market in Europe will fully recover by 2003.
"Demand for software applications, IT security and wireless technology is growing and these kinds of areas will be the drivers for the recovery. This will begin to impact in the second half of 2002, but it won't be until 2003 that the market will return to a state comparable to 18 months ago," commented Minton.
In IDC's new forecast, the fastest-growing market in Western Europe in 2002 will be Sweden, where the market is expected to rebound with an 8.1 percent increase in IT spending this year. Strong growth is also expected in France, Italy, Finland, Spain and the UK. The weakest markets will be Germany, Austria, Belgium and Switzerland.
"The downturn in the German economy has affected IT budgets in central Europe," said Minton. "But even there we see positive signs of a gradual recovery and the beginnings of an improvement in business confidence levels." Minton added that the improvement in the US economy would also have a positive impact on IT spend on Europe.
However, IDC's predictions appear optimistic compared to those from other research organisations. Merrill Lynch said in January that it expected corporate spending on technology to increase by just three percent in 2002, while CyberAtlas Research said at the end of 2001 that European IT budgets will grow by only 1.5 percent during the first six months of 2002.
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