Services Sectors Lead IT Spending Growth in 2016

June, 2016

The modest growth in IT operational spending in 2016 is being led by the services sectors, which far outpace the slow or no-growth manufacturing, distribution, and public sectors. This is according to the annual Computer Economics IT Spending and Staffing Benchmarks study.

IT operational budgets are up a healthy 4.7% at median in the professional/technical services sector, a rise that gives this sector the distinction of having the fastest growth rate of any industry in the study.  It is also broad-based: 89% of the professional and technical services firms, which include engineering, legal, accounting, consulting, marketing, research and other services, plan to increase IT operational spending this year.

Other services sectors—financial services and healthcare services—are also budgeting for above average growth in IT spending. As shown in Figure 1-8 from the study, financial services firms are budgeting for a 3.6% increase in IT operational spending and healthcare organizations a 3.0% increase at the median.

ISS fig 1 8 - Services Sectors Lead IT Spending Growth in 2016

“The services industries are among the most IT-intensive sectors in the economy, and consolidation and technology adoption is helping drive IT spending,” said Dave Wagner, director of research for Computer Economics, Irvine, Calif. “Healthcare organizations are continuing to modernize information systems while grappling with changes brought about by the Affordable Care Act.”

While the service industries provide leadership, the strong dollar and shifting consumer priorities are impacting the retail and discrete manufacturing sectors. Discrete manufacturers, in particular, are planning for no growth in IT operational budgets. The study also finds that IT spending in government and nonprofit organizations remains soft.

The Computer Economics IT Spending and Staffing Benchmarks 2016/2017 study is based on a detailed survey of more than 200 IT executives in the U.S. and Canada on their IT spending and staffing plans for 2016/2017. It provides IT spending and staffing benchmarks for small, midsize, and large organizations and for 22 sectors and subsectors. A description of the study’s metrics, design, demographics, and methodology can be found in the executive summary along with the key findings.

This Research Byte is a brief overview of the findings in our report, IT Spending and Staffing Benchmarks 2016/2017. The full report is available at no charge for Computer Economics clients, or it may be purchased by non-clients directly from our website (click for pricing).