European IT 2008 Market Outlook

With the US economy and IT market poised between slowdown and recession for 2008, the IT markets of Western and Central Europe will once again outperform the US market over the course of this year. However, growth in 2008 will undoubtedly slow compared with 2007 growth for both overall European economies and European purchases of IT goods and services. With Europe likely to experience a slump but no recession, the slowdown in the European tech market will be less pronounced than in the US, leaving the European IT market growing faster than the US IT market. In euros, European IT purchases will grow by 3.5% in 2008 — higher than the US growth of 2.8% in dollars. New investment in software will be stronger than purchases of computer and communications equipment. With the US dollar weakening further against the Euro, dollar-denominated growth in European IT purchases will be strong, making Europe an even more attractive market for US vendors than its faster growth in local currencies would imply.