IT spending defies economic uncertainty

IT spending defies economic uncertainty

Expenditure is forecast to grow at 4.9 per cent, beating the rate of inflation

UK IT spending is expected to grow faster than inflation, despite the economic uncertainty following the US credit crunch.

More than half (58 per cent) of respondents to a survey by the National Computing Centre (NCC) expected their organisation to make steady IT investments in 2008. The average growth rate forecast by the NCC is 4.9 per cent, more than twice January's Consumer Price Index of 2.2 per cent.

“We hear talk of a recession, but the benchmark results indicate that IT purchasers are remaining confident about future economic conditions," said Stefan Foster, managing director at the NCC.

"They are making sure that their businesses have the right technology to deliver growth over the coming years, but they are not over optimistic.”

Operational spending typically represents 39 per cent of total IT spending, according to the NCC. Staff costs account for 35 per cent of the budget, while capital and development spending takes 20 per cent.

The NCC questioned 120 organisations with a total aggregate turnover of more than £32bn, and an a combined IT spend of about £750m.