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Tech spending growth limited to about 5 percent through 2018

Image credit: Oleg Romanciuk / 123rf

Forrester predicts U.S. business and government tech spending will continue to grow by 4.8 percent through 2017 and increase to 5.2 percent in 2018. While these forecasts are higher than Forrester’s projections following the 2016 presidential election, they are lower than the expected numbers from a year ago.

Why the change? Forrester’s latest U.S. tech market outlook explains that moderate GDP growth, political uncertainties and increased cloud adoption are the top three factors constraining U.S. tech growth.

Here are additional key findings from the forecast:

  • Tech staff spending will rise by almost 6 percent from 2017 to 2018, which is slightly up from 2016 (5.7 percent) but lower than 2015 (6.7 percent).
  • Software will be the fastest-growing category of U.S. tech spending in 2017 and 2018 at more than 9 percent.
  • As a result, spending on tech consulting services will reach 6.1 percent in 2017 and 7.4 percent in 2018.
  • Cloud platform services will continue to grow at 25 percent to 30 percent rates in 2017 and 2018, but these investments are cannibalizing traditional tech outsourcing spending, which will only grow at 2 percent to 3 percent over the next two years.
  • Hardware spending will remain low in 2017 with a growth rate of 1 percent, but there will be an uptick in 2018 leading to 4 percent growth in overall spending.

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