Projected 5.5% increase to New Zealand IT spending in 2023

In the latest quarterly tech spending forecast released by Gartner, it is projected that IT spending in New Zealand will grow 5.5% in 2023.

Gartner forecasts that IT spending in New Zealand will increase to almost NZD $17.7 Billion.

"Inflation, skills shortages and supply chain issues continue to have a significant impact across Australia and New Zealand, driving CIOs to be more hesitant, delay decisions or reorder priorities," says John-David Lovelock, VP Analyst at Gartner.

"Despite these economic realities, IT budgets are not driving these shifts and we continue to see local enterprises increase spending on digital business initiatives."

When looking at individual sectors in New Zealand, there are plenty of healthy signs.

Of the sectors that are forecasted to increase in growth, Gartner forecasts double-digit growth in IT services, rising from 9.1% growth in 2022 to 10.4% growth in 2023.

It also projects that Software will slightly decline from the 10.3% growth it accumulated in 2022, but will still have growth in double-digits at 10.0% in 2023. 

Gartner believes the continued strong growth in these sectors is due to organisations looking to increase spending on digital projects.

Communication services are also set to have a very slight drop in growth, dropping from 2.1% growth in 2022 to 2.0% in 2023.

As for Data Centre Systems, Gartner is projecting a significant drop in growth from 23.4% in 2022 to 6.16% in 2023, a 17.24% drop.

However, the sector at most risk is in Devices, with Gartner projecting that growth will decline in the sector from 9.7% growth in 2022 to -3.4% in 2023, a 13.1% drop. This projection comes after the Devices sector achieved strong growth during the pandemic.

Looking worldwide, Gartner also forecasts that worldwide IT spending will increase by USD $4.5 Trillion globally, a 2.4% increase from 2022. This comes after international IT spending declined by -0.2% in 2022.

"Consumers and enterprises are facing very different economic realities. While inflation is devastating consumer markets, contributing to layoffs at B2C companies, enterprises continue to increase spending on digital business initiatives despite the world economic slowdown," adds Lovelock.

"A turbulent economy has changed the context of business decisions and can cause CIOs to become more hesitant, delay decisions or reorder priorities. We've seen this in action with the reshuffling taking place among some B2B companies, especially those that overinvested in growth. However, IT budgets are not driving these shifts, and IT spending remains recession-proof."