North American and European Companies to Defy Looming Recession, with 51% growing IT Budgets in 2023

Despite fears of a looming recession, North American and European firms are set to significantly increase their information technology (IT) budgets for 2023. BanklessTimes.com reports that 51% of these companies plan to raise their IT spending in the upcoming year, while only 6% intend to cut theirs.

The figures reflect a 13% year-over-year (YOY) jump in IT spending across the firms. Median increases stand at 5%, indicating that companies are confident about investing in the sector despite economic turbulence.

Increasing IT budgets are keeping with IT trends

BanklessTimes CEO Jonathan Merry explains that keeping up with IT trends is becoming increasingly important for companies. As such, these are redrawing their IT budgets to reflect them. He holds:

As businesses strive towards digital transformation, they need access to reliable hardware, software, and support services such as cloud storage and cybersecurity solutions. The rise in IT budgets reflects these companies’ commitment towards modernizing their infrastructure and streamlining operations through technology adoption.

Jonathan Merry, CEO of BanklessTimes.com

Merry further identifies three factors as the primary drivers of increasing IT budgets. These include updates to outdated infrastructure (51%), increased priority on IT programs (45%), and the need to support staff growth (43%).

He concludes that while these budgets take up a healthy slice of expenses, the rewards make it a worthwhile investment.

Notable IT trends of 2023

Gigabit Wi-Fi networking is the most popular IT trend for North American and European businesses. Per the BanklessTimes report, 67% of the companies in those regions have already adopted or plan to adopt this technology.

IT automation technology is also a popular option at 65%. Blockchain technology, however, has yet to catch on, with only 35% of organizations adopting or planning to adopt this tech trend in 2023.

Specific IT budgetary trends stand out as well. Enterprises are likely leading the charge regarding increasing their IT budgets for 2023. 61% of them, compared with an average of 51% across all businesses.

Narrowing down to industries reveals that the IT services industry (67%) and financial services (60%) will attract the largest allocations. However, education (27%) is less likely than other industries to increase its IT outlays for 2023.

Expected Challenges

North America is expected to experience more issues related to the IT supply chain than Europe due to growing global trade tensions. Meanwhile, European businesses will more likely face challenges supporting remote workers than their American counterparts.

Additionally, enterprises (businesses with more than 500 employees) are two and half times likely to experience IT labor or skill shortages compared to small businesses (under 100 employees).

It remains uncertain how the long-term effects of a potential recession could disrupt these companies’ plans. But if history offers any indication, there may be a shift away from large-scale investments towards cheaper alternative solutions that can yield comparable results.

Additionally, recruitment within the tech sector may be impacted too, with companies turning more towards hiring experienced personnel rather than investing heavily in training new employees post-recessionary period.