Growth in IT spending will pick up over the next couple of years, but at best the recovery will be slow until 2004.
According to analyst IDC, IT spending in western Europe will grow by 4.4 per cent in 2002 compared to 3.4 per cent in 2001.
This figure will rise to 6.2 per cent in 2003 but the return of healthy levels of growth seen in 2000 is not expected until 2004.
"With the first half of 2002 complete and no significant improvement in business conditions apparent, the chances of a near-term rebound in IT spending in western Europe are slim," said Vicky Hawksworth, senior analyst at IDC.
She added that US accounting scandals weakening markets had made the situation worse.
According to IDC the western European IT market has suffered a number of major setbacks over the past two years. First came the dotcom crash, followed shortly after by the telecommunications slump and knock-on effect on the hardware market. Adding to these woes, the global economy then encountered a significant slowdown.
IDC said that, taking these factors into consideration, the western European IT market has proved relatively resilient and that, with the exception of the hardware market, all major segments have continued to grow.
"A return to healthy IT investment will be hindered until business profitability returns and the restrictions on corporate IT spending are subsequently relaxed," said Hawksworth.
"This will be a gradual process and may take up to six months to materialise; hence overall market conditions in western Europe are not likely to start to improve noticeably before the first half of 2003."
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