Economic Outlook for Global Technology Markets

Stay up to date on how the latest economic trends are impacting global tech markets.

Monitor the Latest Tech Economic Opinions and Conditions

Global technology demand will be shaped by emerging economic conditions for years to come. IDC’s global analyst community monitors the short and long-term implications, providing accurate market data, timely insights, and context critical for action.

The global economy appears to have stabilised in recent months, with a lower risk of recession and increasing possibility of a ’soft landing’, although downside risks such as the Israel-Hamas war continue to cast a shadow over the short term outlook. Even if a recession does unfold in the next 6 months, key business initiatives—like cloud, future of work, and digital transformations—act as tentpoles for IT demand overall, and the emergence of AI is one reason that ICT continues to be identified as a key strategic priority alongside its role as a driver of short-term productivity and efficiency.

Higher interest rates on financing for capital purchases are having a negative impact on some hardware categories, where constraints have shifted from supply to demand —especially PCs. On the other hand, the emergence of Gen-AI is driving stronger investment in some server configurations, and the easing of supply constraints boosted shipments of network equipment in the first half of 2023. Cloud, security and AI-related investments in software and services continue to post strong growth.

The US has been very resilient so far in 2023 and remains on course for a 'soft landing' from inflated growth in the last two years. However, growth in China has been weaker than forecast so far this year, and this is impacting the short-term outlook for the APJ region. In EMEA, Western Europe is showing signs of vulnerability with Germany in recession for the second time in three years, while CEE remains heavily affected by the war in Ukraine. The Israel-Hamas war could escalate into a broader crisis in the Middle East, driving oil prices higher and tipping the global economy into recession. It’s too early to say that we have bottomed out in terms of forecast adjustments.

State of the Market IT Spending Forecast Update:

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Annual Growth of Tech Spend

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Worldwide Black Book Live Edition - Forecast, 2023 | Oct (V3 2023) Release

The latest IDC Future of Resiliency and Spending Survey (Wave 9, October 2023) reveals that IT leaders' expectations about economic growth are no longer improving, and this concern is shaping early budget expectations for 2024. Across all regions, most IT leaders expect GDP in 2024 to be lower than currently projected, and only 40% think GDP will be higher than currently expected in 2025.

At present, this negative economic outlook for 2024 is only having a modest impact on 2024 IT spending plans with 80% of leaders expecting overall spend to be the same or higher than in 2023. The main IT budget areas that IT leaders state are immune to cuts: Security, Risk, & Compliance (26%), Infrastructure & IT Operation optimization initiatives/projects (22%), and AI and Automation initiatives/projects (21%) are the top areas cited as immune to cuts.

Regardless of overall IT spending plans, CIOs are starting to access the implications of GenAI on overall budgets. For the 16% of IT leaders expecting an overall decrease in IT spend, 60% are still planning to either make significant new investments separate from IT budgets (30%) or make larger than normal cuts in other areas (30%) to fund GenAI investments. For the 47% expecting no change in budgets, these GenAI funding approaches are 28% (new funding) and 27% (greater cuts). For the 33% planning to increase overall IT spending, 56% indicated GenAI will be the dominant or most significant factor driving those spending increases.

Anticipated Economic Impact

Chart showcasing how many respondents believe there will be a recession in the coming year

IDC Future Enterprise Resiliency & Spending Survey | October 2023
Q: Thinking about the economic situation in your country, do you think there will be a recession in the coming year? Q: You indicated you think there will be a recession in the coming year. How severe will that recession be? (N= 888)

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