IDC: Some markets to invest heavily in the IT industry

In a time when IT seems to be the last thing on any CIOs shopping list, International Data Corp. (IDC) released a report on Wednesday that may shine some light on an otherwise dreary time for spending.

In the report entitled Worldwide IT Spending Forecast by Vertical Market, 2002-2007: North America, Western Europe, Asia/Pacific, and Rest of World, IDC said worldwide IT spending has reached US$850 billion and is expected to reach US$1.1 trillion by 2007 at a compound annual growth rate (CAGR) of 5.4 per cent from 2002 to 2007.

Discrete manufacturing and banking top the list of IT spenders with discrete manufacturing accounting for 13 per cent of the total amount of IT spending and banking accounting for 12 per cent.

Initiatives made in e-government across all regions will allow the government sector to surpass US$126 billion in 2007 with a CAGR of 7.1 per cent, highlighting the growth potential government has over other vertical industries, according to the report.

On the global scope, IDC expects software spending to reach US$185.6 billion in 2003, hardware spending to climb to US$373.7 billion in 2007 and IT services spending to grow to US$366 billion in 2003.

IDC estimated that the gross domestic product (GDP) growth in Canada to be 3.1 per cent for 2002, 3.3 per cent for 2003 and 3.2 per cent for 2004. The analysts that authored the report are moderately sure that the relatively strong GDP growth in Canada will support the country’s IT spending.

The GDP recovery expected in the second half of 2003 – which analysts say has a good chance of spilling over into 2004 – is due to anticipated business investment plans.

The overall inflation of two per cent expected between 2002 and 2007 will have a low impact on IT spending, according to the report. One reason for this low impact is because the inflation will allow the government to continue fiscal policy stimulus and help support economic growth and recovery.

Market dependence on macroeconomics is the market force that IDC assumes will have a high impact on IT spending. Regardless of positive economic indicators in the Canadian market however, IDC said that as long as there is any uncertainty in the sector, IT budget growth and buying will be inhibited.

IDC’s Canadian Web site can be found online at