IT Budgets At Highest Levels Since 1997

July 6, 2006
As a percentage of revenue, IT spending in 2006 in the U.S. and Canada stands at 2.0%. That's up from 1.7% in 2005 and 1.9% in 2004 according to the 17th annual Computer Economics IT spending and staffing study. The Irvine, Calif.-based research company ...

As a percentage of revenue, IT spending in 2006 in the U.S. and Canada stands at 2.0%. That's up from 1.7% in 2005 and 1.9% in 2004 according to the 17th annual Computer Economics IT spending and staffing study. The Irvine, Calif.-based research company Computer Economics notes that this figure is the highest since 1997 -- when companies were gearing up for Y2K and budgets hit 2.2% of revenue.

These numbers demonstrate that IT budgets are increasing faster than corporate sales. According to the study the median growth in IT spending on a dollar basis across all respondents in 2006 is 4.1%, outpacing the 2005 U.S. GDP growth rate of 3.5% in 2005.

"Companies simply have more money to spend this year," said Frank Scavo, president, Computer Economics. "But we see most of the new spending going toward hardware, software and outsourcing, with not as much toward adding to the IT staff."

Increased resources do result in increases in headcount, however the rate is only 2%, or about half the rate of the increase in IT spending, Scavo explained.

Looking at the sectors that comprise this increase, business services grew 9.7% in 2005, followed by healthcare, pharmaceuticals and medical devices. The weakest growth, though still positive, was seen in the process manufacturing, utilities/energy and wholesale distribution sectors.

http://www.computereconomics.com

Interested in information related to this topic? Subscribe to our twice-monthly Information Technology eNewsletter.

Popular Sponsored Recommendations

Process Mining For Dummies

Nov. 19, 2023
Here it is. Everything you need to know about process mining in a single book, written in the easy-to-understand, hard-to-forget style that ‘For Dummies’ manages so effortlessly...

Gain a competitive edge with real-world lessons on private 5G networks

Nov. 16, 2023
The use of private networks in manufacturing applications is rapidly growing. In this paper, we present valuable insights and lessons learned from the field with the goal of enhancing...

The Manufacturer's Guide to Modernizing Commercial Operations

Sept. 12, 2023
In this guide, learn how a modern approach to commercial operations can help your manufacturing business integrate sales and revenue management to elevate seller productivity ...

The Ultimate Ecommerce Excellence Checklist

Oct. 2, 2023
Scaling ecommerce operations is no easy task when your business is moving fast. Assess your current ecommerce maturity level and set optimization priorities with this practical...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!