• Gartner's forecast for overall global IT spending growth in 2012 in current U.S. dollars has been revised down from 3.7% last quarter to 2.5% now. However, this reduction is due to the recent strengthening in the value of the U.S. dollar versus other currencies.
• Despite ongoing concerns about the global economic recovery — most notably around the resolution of eurozone sovereign-debt problems, the potential for China's real estate "bubble" to spill over and affect the rest of the economy, and rising oil prices — early signs in 2012 suggest the global economic outlook has brightened a little with no more than a 25% risk of a return to recession. Nevertheless, uncertainties remain, and global real GDP growth is forecast at a modest 2.4% for 2012.
• However, reflecting a more stable economic outlook, if the effect of exchange rate fluctuations is stripped out of the forecast, our projection for global IT spending growth in constant U.S. dollars has been revised upward from 4.6% last quarter to 5.2% now. All of this increase can be attributed to modest upward revisions in the forecasts for spending on media tablets, mobile devices and mobile services.
• Excluding telecom services to give a more representative view of the long-term outlook for IT spending growth, annual average growth from 2011 through 2016 is forecast at 5.3% in current dollars and 5.9% in constant dollars, driven by client devices (PCs, media tablets and mobile devices), software, and professional IT services.

Global IT Spending by Sector

Short-Term Outlook

Gartner's forecast for dollar-valued global IT spending growth in current U.S. dollars has been revised down from 3.7% to 2.5% for 2012.

In constant U.S. dollars, i.e., stripping out the effect of exchange rate fluctuations, our forecast for global IT spending growth in 2012 has been revised upward from 4.6% last quarter to 5.2% now.

The 2012 growth outlook across all technology sectors in both current and constant U.S. dollars is shown in Table 1.

Source: Gartner (March 2012)

Note: All figures are expressed in exchange-rate-constant U.S. dollars based on 2008 exchange rates. Effectively, the figures report dollar spending amounts assuming no change in exchange rates from 2008 levels. Consequently, growth rates calculated from the figures reflect spending growth absent the scaling effects of movements in regional currencies versus the dollar on growth. Such so-called constant-dollar growth rates are generally considered to be superior indicators of spending growth than growth rates calculated from dollar figures that have not been corrected for exchange rate movements, because the latter rates will reflect the effects of any movements in regional currencies versus the dollar, as well as underlying regional spending growth.

Currency Impact

The difference of 1.8 percentage points between current U.S. dollar growth and constant U.S. dollar growth for IT spending in 2012 reflects the impact of exchange rate fluctuations between other world currencies and the U.S. dollar. In fact, the exchange rates used in this forecast update assume that other world currencies will depreciate by 3.7% on average against the dollar between 2011 and 2012, compared with 1.2% in our previous forecast. This relative weakening in the value of other currencies versus the U.S. dollar, which is the currency we use to aggregate our forecast, means that dollar-valued global IT spending growth in 2012 is reduced, all other factors remaining the same. For this reason, it is useful to look at constant U.S. dollar growth, which strips out fluctuations in exchange rates.

Contribution to Change in Constant U.S. Dollar Growth

In constant U.S. dollars, our forecast for global IT spending growth in 2012 has been revised upward by approximately 0.6 percentage points from 4.6% last quarter to 5.2% now. All of this increase can be attributed to modest upward revisions in the forecasts for spending on media tablets, mobile devices and mobile services.

Enterprise IT Sector

In line with the currency-related reduction in growth for overall IT spending in 2012, we expect a similar reduction in enterprise IT spending growth this year, with the added impact of government austerity measures adding a further head wind. However, on a brighter note, growth in small-and-midsize-business IT spending will be above average for enterprises as a whole and particularly strong in emerging regions.

For more details on these forecast updates, please see our webinar ( Gartner Worldwide IT Spending Forecast, 1Q12 Update ) where we'll highlight the trends in IT spending by industry vertical and size of business.

Long-Term Outlook

Through 2016, forecast long-term annual average growth in global IT spending is forecast at 3.9%, although this figure is heavily influenced by the relatively slow growth in the telecom services market, which accounts for almost half of overall IT spending. Excluding telecom services to give a more representative view of the long-term outlook for IT spending growth, annual average growth from 2011 through 2016 is forecast at 5.3%, driven by hardware, software and telecom equipment.

A summary of the forecast data is shown in Table 2.

Source: Gartner (March 2012)