North Dakota among top states for IT spending: Is it the oil boom?

IDC says four out of the 50 states will see growth in enterprise IT spending exceed 7 percent over the coming year.
Written by Joe McKendrick, Contributing Writer

New data out of IDC predicts enterprise IT spending will average about 6 percent over the coming year within the United States. Hot spots include North Dakota, Texas, Arizona, and Utah.

Oil well photo from US Occupational Safety and Health Administration
Image: US Occupational Safety & Health Administration

That's the finding from IDC's United States Black Book 4Q12, which calculates that total IT spending on hardware, software, and IT services across all 15 enterprise industries is forecasted to grow by 6 percent in 2013, to approximately $474 billion.

Top states for enterprise IT spending this year will be Arizona, North Dakota, Utah, and Texas, with growth rates topping 7 percent, IDC said. The consultancy attributes the growth to demand within healthcare, manufacturing, and professional services.

But North Dakota's robust IT scene — and likely, to a great extent, Texas — may be attributable to energy, and the fact that North Dakota has lately become the top oil-producing state in the nation. It has to be the oil, and the effect is trickling down to create a huge economic boom for all types of industries in these states.

How times change. Until recently, North Dakota was seen as a cold, blustery farm belt state with towns and cities being abandoned as fast as young generations could leave. Now, the state is experiencing the most significant energy boom seen in the U.S. in a generation. More than 700,000 barrels of oil every day are being extracted from the state's Bakken region, up more than 50 percent from a year ago.

Unemployment in North Dakota has been hovering around 3 percent, which is essentially full employment. It sounds as if there will be incredible opportunities for IT professionals in the state.

Things have been a bit less robust for the rest of the nation. The report cautions that over the last quarter, the US economic outlook has been clouded with uncertainties surrounding the fiscal cliff, contracting GDP growth, and declining international trade owing to reduced economic activity in the Euro zone. IDC expects the US economy to stabilize in the second half of 2013, leading to moderately strong IT spending growth.

IDC said healthcare IT leads the way, forecast to grow by more than 8 percent in 2013, due in part to the need to process and analyze increasing volumes of data from new clinical systems such as electronic health records. The professional services industry is also expected to grow more than 8 percent. "A high correlation between overall corporate profitability and IT spending by professional services firms suggests robust spending within this industry as corporate profits are forecasted to improve," the IDC folks said.

The data is based on IDC's Worldwide Black Book, which provides forecasts for IT spending in 54 countries around the world. IT spending forecasts focus on 25 individual market segments across hardware, software, IT services, and telecom services.

Editorial standards