Gartner Lowers 2023 Worldwide IT Spending Forecast to 2.4% Growth

Worldwide IT spending is likely to continue to grow in 2023, albeit at a slower pace than analyst firm Gartner first forecast.

Gartner released its latest IT spending forecast on Jan. 18, reporting that it expects worldwide IT spending to grow by 2.4% in 2023 to an estimated $4.5 trillion. The 2.4% growth forecast for 2023 is significantly lower than the analyst firm's prior estimates for 2023, which had pegged growth at 5.1%.

Alongside the revised estimates for slower growth in 2023, Gartner also updated its estimates for worldwide IT spending for 2022. Gartner now estimates that IT spending in 2022 will total $4.39 trillion, representing a decrease of 0.2% compared with 2021.

There is, however, some nuance in the revised 2022 figures due to fluctuations in the value of the U.S. dollar. John-David Lovelock, distinguished VP analyst at Gartner, said that the rising U.S. dollar pushed the 2022 spending down to -0.2%. However, the constant currency growth rate remained unchanged in 2022 at 5.5%.

"Overall spending on IT worked out as we expected at the country and market level," Lovelock told ITPro Today. "The rise of the U.S. dollar was also expected, but surprising in just how much it appreciated against other currencies."

2023 Gartner Worldwide IT Forecast Identifies Where IT Spend Is Going

IT budgets in 2023 are not growing at a uniform rate across all IT service segments, and budgets are actually declining in some segments.

Gartner is forecasting that IT budgets for devices will decline by 5.1% in 2023 to approximately $686 billion. The forecasted 2023 decline is actually an improvement over the 10.6% decline in device spending for 2022.

At the other end of the spectrum, Gartner is projecting healthy growth of 9.3% for software, up to an estimated $856 billion. IT services is another area that is predicted to outperform other segments, with forecasted growth in 2023 of 5.5%.

Rounding out the forecast, data center systems growth is forecast at 0.7% and communications services at a paltry 0.1%.

Tight Labor Market Is Affecting Spending on IT Services

According to Gartner, the ongoing challenges that organizations face recruiting and retaining IT talent are having an impact on IT service spending.

Gartner notes that spending on IT services is increasing at a faster rate than spending on internal services across all industries. The analyst firm is projecting that consulting spending will reach $264.9 billion in 2023, representing a 6.7% increase from the previous year.

Given that outlook, there are  few things that IT operations professionals should be focused on for 2023.

To ensure consistent IT operations in the future, Lovelock said that it is crucial to balance work across different locations, including cloud, edge, hybrid, and on-premises. He noted that it's also important to balance work across different entities, including IT staff and consultants.

"IT operations professionals should be focused on solving their skills gap," Lovelock said.