International Data Corporation (IDC) currently forecasts worldwide IT spending to decline 2.7% this year due to the economic impact of the COVID-19 pandemic.
Hospitality and tourism-heavy industries like transportation and personal and consumer services are expected to be the most negatively impacted markets with IT spending expected to decline by 5% or more, according to IDC.
Both markets are relatively small in terms of IT spending. Discrete and process manufacturing are both large market opportunities for technology (nearly $400 billion combined) and face significant risks due to the virus with spending expected to fall by more than 3% in 2020.
“While industries that offer digitally-enabled or critical services offer some bright spots, those industries that rely on physical products, an in-person presence, or provide luxury services are struggling,” said Jessica Goepfert, program vice president, Customer Insights & Analysis.
“Once the near-term reprioritisation is underway, the next step is to understand the path to recovery.
“For instance, industries which have suffered major shutdowns and layoffs will be slower to invest in technology than those that have been able to maintain somewhat normal operations.
“In order to mitigate risk and exposure to the economic downturn, technology suppliers must reprioritise and refocus their efforts toward the more resilient segments.”
IT spending in the healthcare and telecommunications segments are also forecast to grow slightly as they respond to new demands presented by the pandemic.
Professional services will see the strongest growth in IT spending this year with an expected year-over-year increase of 1.7%, said IDC.
“As a consequence of the Coronavirus outbreak, market conditions are changing fast, driven by daily developments in the pandemic and the response that governments are putting into place,” said Serena Da Rold, program manager, Customer Insights & Analysis.
“IDC is supporting clients with more frequent updates to our forecasts across technologies, geographies, industries, and segments.
“In the April (V1 2020) release, we have provided our first assessment of COVID-19 impact by industry and company size across 120 technologies in 53 countries.
“The next special release of IDC’s Worldwide ICT Spending Guide: Industry and Company Size is planned for the first week of May.”
