IDC expects European vertical markets will continue to show different patterns of growth and opportunities for vendors. Overall, networking spending is expected to grow faster across all vertical industries in Western Europe, rising at 11.8% CAGR from 2003 to 2008.
Finance is expected to remain one of the most attractive sectors, showing higher than average spending over the forecast period. Growth will be driven by customer interaction, operations management, and regulatory compliance. Finance is expected to reach $78.3 billion in IT spending in 2008.
The public sector will continue to offer the best short-term growth opportunities. The first phase of massive IT investment was centered on front-end egovernment solutions, and the next wave will focus on taking advantage of IT to improve the quality of specific services. Demand will continue to be stronger at a local level, where modernization requirements related to egovernment are stronger and funding is generally more available. Growth in healthcare strengthened in 2004 and will remain high in 2005, while education will register only small positive growth. Central government IT spending will register a 5.4% CAGR in the forecast period, while local government will perform better (5.9% CAGR). Healthcare and education will have the highest IT spending CAGR in the forecast period, at 8.2% and 6.1% respectively.
Utilities will remain one of the fastest-growing vertical markets. The deregulation process continues and is creating IT demand in the sector. IT spending on utilities will rise 5.8% CAGR in the 2003-2008 period, according to IDC estimates.
In manufacturing, opportunities will be found in CPG, electronics, and pharmaceuticals.
Growth will become positive in communications in 2004, but more opportunities will start in 2005. IT spending in communications is expected to rise at 6.7% CAGR in the 2003-2008 forecast period.
The study, Western European Information Technology Vertical Markets Spending, Forecast Update, 2003-2008 (IDC #M56L, December 2004), provides new data and analysis on Western European IT spending trends by vertical market for the period from 2003 to 2008. This study is an update of Western Europe Information Technology Vertical Markets Spending, Forecast 2003-2008 (IDC #M01L, May 2004). IT spending estimates and forecasts are provided for agriculture, construction, mining, banking, business services, central government, communications, discrete manufacturing, education, health, home, insurance, local government, other, other finance, process manufacturing, retail, transport, utilities, and wholesale in the top 5 Western European countries (Germany, the United Kingdom, France, Italy, and Spain) as well as total Western Europe.