Projected 2.4% increase in Global IT spending in 2023

In the latest quarterly tech spending forecast released by Gartner, it is projected that IT spending worldwide will grow 2.4% in 2023.

Gartner, the technology analyst firm, forecasts that IT spending across the globe will increase by USD $4.5 Trillion globally, a 2.4% increase from 2022. This comes after international IT spending declined by -0.2% in 2022. This forecast is also down from the 5.1% growth that was projected in the previous quarter.

"Consumers and enterprises are facing very different economic realities. While inflation is devastating consumer markets, contributing to layoffs at B2C companies, enterprises continue to increase spending on digital business initiatives despite the world economic slowdown," says John-David Lovelock, VP Analyst at Gartner.

"A turbulent economy has changed the context of business decisions and can cause CIOs to become more hesitant, delay decisions or reorder priorities. We've seen this in action with the reshuffling taking place among some B2B companies, especially those that overinvested in growth. However, IT budgets are not driving these shifts, and IT spending remains recession-proof."

When looking at individual sectors worldwide, there are plenty of healthy signs.

Gartner forecasts continued growth in Software, increasing from 7.1% growth in 2022 to 9.3% growth in 2023.

Gartner believes the continued strong growth in this sector is due to organisations looking to increase spending on digital projects.

It also projects that IT Services will increase from the 3.0% growth it accumulated in 2022 to 5.5% in 2023. 

Communication services are projected to have an increase in growth, rising from -2.4% growth in 2022 to 0.1% in 2023.

As for the Devices sector, Gartner is projecting the industry will still be in decline, albeit less so, with growth rising from -10.6% in 2022 to -5.1% growth in 2023.

"During the height of the pandemic, employees and consumers had technology refreshes of tablets, laptops and mobile phones due to remote work and education," says Lovelock. 

"Without a compelling reason for an upgrade, device assets are being used longer and the market is suffering."

However, the sector with the most change is Data Centre Systems, with Gartner projecting that growth will decline in the industry from 12.0% growth in 2022 to 0.7% in 2023, an 11.3% drop. 

These projections will have important outcomes when looking to job vacancy rates, which have been steadily increasing every quarter. The open jobs per unemployed rate is also at record lows in many countries. 

There is high competition for skilled IT staff, which is challenging CIOs, especially those in companies that struggle to grow without said talent.

While spending in the software sector continues to increase, the IT services market is growing as companies look to hire external consultants. As a result, consultancy spending is expected to rise to $264.9 billion in 2023, a growth of 6.7% from 2022.

"CIOs are losing the competition for talent," says Lovelock. "IT services spending is growing more quickly than internal services in every industry. Skilled IT workers are migrating away from the enterprise CIO towards technology and service providers (TSPs) who can keep up with increased wage requirements, development opportunities and career prospects."