Forrester: European IT Spending to Grind to a Halt

The euro crisis has IT shops across Europe tightening their belts, according to the analyst firm.
By Chris Kanaracus
News Jun 21st 2012

IT spending in Europe will virtually grind to a halt this year and next due to economic uncertainty over the euro currency, according to a Forrester Research report.

"The most likely result is either near-zero growth or economic recession in 2012, depending on the country," Forrester analyst and lead report author Andrew Bartels wrote. "The worse case is a possible collapse of the euro and a resulting depression."

It is likely that European officials will "do just enough" policy-wise to avoid that worst-case scenario, Bartels added. Under those circumstances, IT spending growth will still only amount to 0.3 percent this year.

But if the euro collapses, tech spending in Europe will fall dramatically, Bartels said. "CIOs need to match IT spending plans with this bleak outlook for 2012 while preparing contingency plans for a euro collapse and hoping for somewhat better prospects in 2013," he added.

There are much different technology adoption rates among European countries, with nations such as Denmark and Sweden being very advanced, while Greece, Italy and other southern countries are less so, according to the report.