IT Spending To Decline 5.5% In 2015

Worldwide spending on information technology is on pace to decline 5.5% this year, according to new data from Gartner. Analysts are blaming the decline on the rising U.S. dollar, which weighed heavily on U.S. companies in the first half of 2015. Excluding the foreign exchange impact, the market is projected to grow 2.5%. "We want to stress that this is not a market crash," said John-David Lovelock, research vice president at Gartner. "However, there are secondary effects to the rising U.S. dollar." The higher valuation of the dollar has forced vendors to raise prices to protect costs and margins, Lovelock said. Communications services are expected to take up the vast majority of IT spending at $1.5 trillion, but report the largest year-over-year percentage decline, at 7.2%. The device market is expected to be buoyed by growth in Apple Inc. iPhone sales in China. However, Gartner predicts that strong smartphone unit growth will start to flatten.