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."