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Europe Last to Recover From Economic Crisis

Europe Last to Recover From Economic Crisis

Western Europe is lagging behind the rest of the world in recovering from the economic crisis.

A recent report from analyst firm Gartner predicts that in Western Europe IT spending will drop by 3.3 per cent in 2010. Throughout the entire Europe, Middle East and Africa (EMEA) region, IT spending it set to decline by 2.1 per cent.

The drop was blamed in large part on debt fears in the EU. Analysts believe that corporations are holding back on IT spending in order to avoid debt issues.

Gartner is predicting that the debt issues will continue to slow growth over the coming years.

"This decline in IT spending in 2010 is placing EMEA as the slowest region to fully overcome the downturn," said Gartner senior vice president and global head of research Peter Sondergaard.

"We expect Western Europe to record the worst decline in EMEA in 2010, and experience the slowest long-term growth rate with a compound annual growth rate of 0.8 per cent through 2014."

Analysts do, however, predict growth in the hardware spending market. The company predicts computing hardware sales to hit $79.4bn on the year, an increase of 4.6 per cent from 2009.

"We are seeing a rise in shipments across hardware due to the low volumes in 2009 and from organisations gradually returning their replacement cycles to a normal length," said Sondergaard.

Research firm iSuppli issued a similar forecast for the market last week when it forecast steady growth for the PC hardware sales market on the year.

Meanwhile, the IT services sector is predicted to be the hardest hit by the downturn. Analysts have forecasted a 5.6 percent drop on the year for the EMEA region.


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