Gartner outlines Brexit IT spend implications

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27 June 2016 | 0

The Brexit vote puts a drag on global IT spending, but the UK will see the worst impact, Gartner said in a new spending forecast.

Gartner had predicted a rise in UK tech spending by 1.7% this year, for a total spend of $179.6 billion (€163.3 billion) in US dollars. But this forecast was before the decision by UK voters to leave the European Union.

The Brexit vote lowers the 2016 UK spending estimate between 2% and 5%, moving it into negative territory, said Gartner. It expects UK IT spending to remain negative into next year.

The leading reason for the decline is summed up in one word by Gartner analyst John Lovelock: “Uncertainty.”

“It’s going to be persistent problem over the next six months,” said Lovelock, regarding the Brexit vote. The UK not only faces the loss of Prime Minister David Cameron, who plans to resign by October, but two years of negotiation with the EU over the terms of the exit.

Global IT spending is not spared. Gartner had forecast $3.4 trillion (€3.1 trillion) this year, a gain of 1.5% in constant dollars. It has revised that to say that global IT spending this year “will remain” above a 1.2% increase this year.

The IT spending most affected in both consumer and business markets is discretionary spending, said Lovelock.

The political turmoil in the UK hurts tech spending in Europe overall. The UK accounts for 26% of the tech spending in Western Europe, surpassing Germany at 18%, which is the largest economy. Lovelock credited heavy use of business services for UK’s large IT spending.

The IT spending forecast this year for Western Europe was flat to begin with — just 0.2% growth at $688.7 billion (€626 billion), a figure which includes the UK.

 

 

IDG News Service

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