World spend 'will fall'

18 January 2001
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18 January 2001

Global IT spend will fall over the next five years despite its continued growth in Europe this year, according to a survey by investment bank Merrill Lynch.

European IT budgets will rise on average by 13 per cent this year after a rise of 14 per cent in 2000. But Merrill Lynch global technology strategist Steve Milunovich believes an estimated 5 per cent increase in US IT growth - down from 12 per cent last year - is a precursor to a global slowdown.

"But for Internet technologies, which show few signs of slowing, IT budgets would be down even more," he said.

IT firms disputed claims of a slowdown. "It's no longer a case that if the US sneezes the UK catches a cold," said David Prentice, director of Prentice Dolan Computer Services.

"If anything, we have seen an increase in firms outsourcing their IT requirements, particularly Internet technology, and I can't see that slowing. Internet start-ups might be crashing, but SMEs are just beginning to develop websites and e-commerce in large firms is reaping rewards."


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