The global IT spending will continue to slow down by 4.4 per cent to $3.25 trillion for the fifth consecutive month, as technology investments continue to show the impact of a weakening economy.

In its new monthly forecast for worldwide IT spending growth, IDC projected overall growth this year slightly down from 4.5 per cent in the earlier forecast and represents a swing from a 6 per cent growth forecast in October 2022.

“Since the fourth quarter of last year, we have seen clear and measurable signs of a moderate pullback in some areas of IT spending,” said Stephen Minton, vice president in IDC’s Data and Analytics research group.

Tech spending remains resilient compared to historical economic downturns and other types of business spending, but rising interest rates are now impacting capital spending, he added.

After reductions to PC forecasts a month ago, IDC has now scaled back its expectations for some additional hardware categories including servers, wearable devices, and peripherals.

Forecasts have been reduced for on-premise infrastructure investments by enterprise buyers, while cloud and service provider deployments remain more resilient overall.

Service provider spending is still weakening from last year’s highs as the industry adjusts to slower post-Covid growth, but planned investments by cloud and hyperscale providers have broadly held up since last month.

Strong demand for cloud services continues to drive growth despite inflationary pressures but non-cloud spending is set to decline, the report mentioned.

“The most significant impact remains concentrated in consumer markets with consumer IT spending now forecast to decline by 2 per cent this year,” said Minton.

This will be a second consecutive year of declining consumer tech spending, a huge change in fortunes from consumer growth of 18 per cent in 2021.

“On the other hand, enterprise demand for cloud and digital transformation remains strong despite economic headwinds,” he added.

Cloud infrastructure, software, and services are growing more slowly than a year ago but continue to account for a larger share of total IT spending.