The market grows by just 0.8% worldwide – EMEA continues to fall behind

2018 was a good year for the IT and communications industry. My forecast (based on actual results up to September) suggests that spending grew by 4% to $6.5 trillion. Net profit for the industry’s suppliers will also have flourished, growing 13% to $785 billion, an abnormal extension of the 23% growth in 2017. Total industry headcount grew by 3% to 19.7 million – an all-time high despite the increasing use of AI and ML by suppliers.

In 2019 I expect less growth all round; spending growth will be just 0.8% to $6.7 billion, net profits will decline by 0.3% and industry employment will grow by 1.0%. My rationale is that increasing nationalism (Trump, Brexit, Catalonia, etc.) will limit trade. It is highly unlikely that significant manufacturing operations will move away from the Far East (and particularly China, Taiwan and South Korea) to the US or Europe – we’re just too globalised and labour costs remain too advantageous.

Spending growth at a regional level in the Americas (+1.4%) and Asia Pacific (+1.2%) will both be better than EMEA, where it will decline by 0.3% (see my Figure).

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