Worldwide IT and business services revenues will grow from $1.13 trillion in 2022 to $1.2 trillion in 2023, or 5.7% year-over-year growth, according to an IT spending forecast from International Data Corporation. That’s a growth rate of 3.5% after accounting for exchange rates, IDC said.
IDC increased its worldwide IT spending forecast slightly. The five-year compound annual growth rate (CAGR) is now projected to be 5.2% compared to the previous forecast of 4.9%.
The firm said that most of the uplift this year will be from managed services and project-oriented markets, which the company says are professional services.
“While we still believe the recession will have a direct impact on professional services, the strong growth in 2022, including business consulting, suggests that slowdowns in 2023 and 2024 will be milder than previously assumed, further helped by lower attrition rates [and] partial inflation adjusted price adjustments, as well as the need for companies and governments to digitize their operations,” IDC said.
U.S. IT Spending Forecast
The U.S. market outperformed the worldwide average for 2022, growing 6.2%, which was 1.17 percentage points more than expected.
Slowdowns in growth are expected this year and in 2024, but IDC says that they will be more gradual than previously anticipated.
U.S. market growth will be 5.8%, 5.7% and 5.2% during the next three years, according to the researchers.
In a prepared statement, Xiao-Fei Zhang, the program director for IDC’s Worldwide Services Tracker, cautioned that the availability of skilled talent could impact forecasts.
“As we project certain markets may recover in 2025, a major talent crunch may return,” said Zhang. “The digital skill gap is structural and demographic. Vendors should remain laser focused on talent management and re-skilling during the market slow-down.”