Brexit will impact IT spending in UK and Europe

Global IT spending is expected to be flat this year, hitting $3.41 trillion (£2.63tr), market analysts Gartner says. But an important factor hasn’t been taken into consideration.

Gartner says the global IT spending will be up from last quarter’s 0.5 percent negative growth. These changes are mostly driven by fluctuations in currency, so it should be business as usual. However, the forecast was made assuming the UK would not vote to leave the European Union. As we all witnessed, that surprise move has shaken global economy, so different outcomes are now also a reality.

"The current Gartner Worldwide IT Spending Forecast assumes that the UK would not exit the European Union. With the UK’s exit, there will likely be an erosion in business confidence and price increases which will impact UK, Western Europe and worldwide IT spending", says John-David Lovelock, research vice president at Gartner.

Gartner says IT spending in the UK and Europe will be the fastest to feel the changes of Brexit. The UK should be less attractive to foreign workers now, disclosing a feeling of uncertainty about the workplace. UK’s IT departments will have a challenging task of retaining current non-UK staff, while having a lesser pool of talent to choose from.

While data centers and enterprise software will see a global enterprise spending rise, two and 5.8 percent respectively, PC recovery will have to stay on hold this year. Mostly because of economic issues surrounding Russia, Japan and Brazil, but also because of people willing to use old PCs longer, the market won’t experience a full recovery this year.

IT services spending will hit $898 billion this year, representing a 3.7 percent growth, with Japan leading the way. Communications spending is down 1.4 percent, mostly because of "price wars" going on in North America and Europe.

A detailed analysis will be presented in the webinar "IT Spending Forecast, 2Q16 Update: New Options Are Disrupting Established Markets", taking place July 12 at 11am EDT.

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