Gartner cuts its 2012 IT spending outlook on U.S. dollar strength

Summary:Gartner's global IT spending forecast takes a hit due to a stronger U.S. dollar.

Global IT spending is expected to be up 2.5 percent in 2012, according to Gartner. However, that pace is down from Gartner's previous projection of 3.7 percent measured in U.S. dollars.

Gartner said that the 2012 outlook for IT spending is mixed, but much of the issue is fluctuations of the U.S. dollar. Global IT spending is expected to be $3.7 trillion in 2012.

According to Gartner, a strengthening U.S. dollar has trimmed the growth rate. In constant dollars, Gartner said IT spending will increase 5.2 percent. A weak U.S. dollar inflates the global IT spending tab because international currencies have more buying power. Typically multinational companies benefit from a weak dollar as those euros and Yen get converted back to U.S. currency. That effect is reversed when the dollar strengthens.

Overall, Gartner analyst Richard Gordon said that the "global outlook has brightened a little." But there are wild cards for IT spending. For instance, government IT spending is expected to contract globally as Europe cuts back via austerity measures and a debt crisis. U.S. government IT spending will be flat.

SMB spending will hit $874 billion globally in 2012 and hit $1 trillion in 2016.

Topics: CXO, IT Priorities

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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