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IT spending set to stall this year on China slowdown: IDC

The research firm is calling for a mere two percent uptick in the global IT market this year.
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Written by Natalie Gagliordi, Contributor on

Global IT spending is set to post a "major slowdown" this year, according to the latest data from IDC.

After relative stability last year, the research firm said 2016 will see continued saturation of the smartphone market on top of economic weaknesses in emerging markets. When combined with a first-ever expected decline in China, the result is what could be the slowest pace of IT spending out of the last six years, IDC said.

Specifically, IDC is calling for a mere two percent uptick in the global IT market this year. Total IT spending on hardware, software and services will reach $2.3 trillion in 2016. Including telecom services, total ICT spending will increase to $3.8 trillion, according to IDC.

"Excluding mobile phones, overall tech spending has continued to grow at 3-4 percent each year in constant currency terms since we recovered from the disruption of the financial crisis," said Stephen Minton, VP of IDC's Customer Insights and Analysis group.

When looked at geographically, IT spending in the U.S. is expected to fare better than other regions with an estimated 4 percent increase. The U.S. rise is particularly notable in light of the declining PC market and weaker growth in servers and storage, IDC said.

China, however is expected to decline at minus 0.3 percent.

"The slowdown in China is largely connected to increasing rates of market penetration and price competition, but the current economic uncertainty also represents a significant downside risk for the rest of 2016," Minton added. "Emerging markets in general are fragile, and weaker growth in China has already had a negative impact on countries such as Brazil."

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