IT managers are slightly more optimistic over budget rises than they were last year, in part due to increased government spending on IT.

HP's annual Pressure Point Index survey of IT managers showed that 36 per cent anticipate higher spending next year, compared to 33 per cent in 2005 and 25 per cent in 2006.

The public sector IT managers questioned were significantly more optimistic, with nearly half expecting budget growth.

"A lot of the major transactions, especially in outsourcing, have been government led, and this continues to be trend," said Gerry Sheridan, vice president of HP Services in the UK & Ireland.

"There is stuff in the pipeline now about identity cards and the e-borders initiative that will drive this spending increase further."

The survey also offers hope to companies looking for an increase in hardware sales. Nearly half of those questioned are looking to increase spending on infrastructure and the services that come with it, making this the key priority for most managers ahead of applications and staff costs.