Worldwide IT and business services revenue is forecast to grow by 5.6 percent in 2022, according to the latest IDC report.
The 2022 market growth represents an increase of 160 basis points from IDC’s October 2021 forecast. The improved market view reflects robust 2021 bookings and pipelines by large services providers, an improved economic outlook, and inflationary impact on the services market, offset by the negative impact of the Ukraine-Russia conflict.
The IT and business services market will expand throughout the next few years at a rate of 4-5 percent, representing an increase of 40 to 80 basis points each year, pushing the market’s long-term growth rate to 4.6 percent, up slightly from the previous forecast of 4.3 percent, IDC said.
The Americas services market is forecast to grow by 5.3 percent in 2022, up 150 basis points from the October 2021 forecast. This is attributed to a faster economic rebound and the impact of inflation. The trend will continue in the short-term: 2022 and 2023 growth rates were adjusted up by 150 and 100 basis points, or around 4 percent year-over-year growth for the next five years.
Canada and Latin America regions will see recovery well into 2022 and 2023. Latin America’s near-term growth outlook is further lifted by the commodity price rally since March.
The outlook for the U.S. market has also been also adjusted up by 160 and 80 basis points for 2022 and 2023, respectively.
IDC’s 2022 growth forecast for EMEA (Europe, Middle East, and Africa) was raised by more than 220 basis points.
IDC has reduced the Central & Eastern Europe (CEE) forecast significantly due to the conflict in the Ukraine. CEE services market will grow by 5.5 percent and 7.3 percent in 2022 and 2023, respectively, down from previous forecast of 9-10 percent growth. Russian and Ukraine markets will shrink significantly this year.
IDC forecasts the Western Europe region will grow by more than 6 percent in 2022, up by 280 basis points from the last forecast. The improved outlook is largely due to the EU’s revised 2022 GDP outlook at the end of the end of 2021. EU-funded investments will be driving services spending. Inflation also contributed to nominal growth, although to a smaller degree.
The Middle East & Africa’s (MEA) growth prospects for 2022 and 2023 have been raised by 250 and 100 basis points, respectively.
Asia Pacific’s growth outlook improved by 0.9 percentage points in 2022, largely due to China and other developed Asian markets such as Australia, Japan, Singapore, Korea, etc. Japan’s growth rate was lifted by 0.2 to 0.6 percentage points per year for the next five years while Australia, New Zealand, Korea, and Singapore all saw adjustments of 100+ basis points in 2022 and 2023 growth rates.
The forecast for China’s market growth has been adjusted up to 6.4 percent and 8 percent for 2022 and 2023. IDC believes that digital transformation remains central to China’s long-term new infrastructure initiatives, which will drive services spending in both the public sector and strategic industries such as BFSI, manufacturing, and energy.