18 Jul 2022

The Economic Recession Is Not Impacting All European ICT Markets Equally, According to IDC

According to the most recent edition of Black Book Live published by International Data Corporation (IDC) in June 2022, ICT spending in Europe will grow by 3.7% year on year in 2022. Considering the unstable macroeconomic and political situation, IDC prepared an alternative forecast, labelled a "recession scenario," which reflects an expected negative impact and shows a modest contraction in ICT spending of 2.2% for the year.

In the event that European economies lapse into a recession, it will have a major impact on devices spending. Technologies like security appliances, infrastructure as a service, software, and telecom equipment are expected to be less severely impacted.

Worsening economic conditions will slow down demand for PC and tablets in Europe, leading to large inventories, while factors such as the increasing cost of living, product shortages, and suspended shipments will also inhibit the market. In 2022, "recession scenario" spending will be 5% lower than the spending forecast in the standard outlook of Blackbook Live. In 2023, the difference will be 9.8% lower.]

Any recession can additionally impact the infrastructure markets in Europe, which are already suffering from logistics issues and a lack of components. Growing interest rates will force companies to reduce loans from banks, which will also slow demand for infrastructure.

However, security hardware spending is expected to stay stable during a possible recession, maintaining 99.5% of the current Blackbook forecast in 2022 and 98.2% of forecast spending in 2023. Many organizations from both public and private sectors are going to increase investments in security, due to the need to protect their data from cyberattack. Investments in cloud infrastructure are also expected to stay strong: In addition to benefits like flexibility, cost effectiveness, and scalability, cloud will enable increased resilience and business continuity in the event of a recession.

Related to security, spending on software solutions will also be marginally affected by a recession. Demand for AI platforms and applications that are part of organization's digital transformation agenda is expected to continue unabated.

The European telecom equipment market is likely to remain relatively resilient during an economic downturn. Data volumes will continue to increase, and telcos will need to invest in routing and wireless equipment.

IDC’s Worldwide Black Book: Live Edition is updated monthly with the latest IT spending forecasts for annual growth across 100 countries.

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About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading tech media, data and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights: http://bit.ly/IDCBlog_Subscribe.

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