As the economy rises and the raging pandemic gets doused with vaccines, tech spending is set to grow. Forrester Research predicts that overall growth in U.S. tech budgets will be up by 7.4 percent this year and rise by 6.7 in 2022.
In a news release, the market researcher predicted software will power the U.S. tech spending recovery — with growth accelerating to almost 10 percent this year. Forrester also predicted increased demand in the areas of tech consulting and tech outsourcing services.
The changed forecast comes as federal stimulus spending boosts the U.S. economy and business in general picks up as the COVID-19 crisis eases.
The U.S. Bureau of Labor Statistics Employment Situation Summary for June had jobs growth beating economists’ estimates. The report, released Friday (July 2), said total nonfarm payroll employment rose by 850,000 in June, far outstripping the 583,000 jobs created in May.
On the tech front, James McGlennon, Liberty Mutual Group’s chief information officer, told The Wall Street Journal that his department plans to spend more this year on the software and tools that came to the fore during the pandemic.
“Our investments in data, analytics, [and] artificial intelligence help us to create new experiences for quoting, binding, payments and claims,” McGlennon said. He added that the insurer will also put more money into data analytics and cybersecurity.
Advertisement: Scroll to Continue
In its report, Forrester said that CIOs at U.S. companies across several industries are expected to spend more on software in 2021, with an emphasis on software related to process automation, artificial intelligence and security. The WSJ noted that Forrester was raising its 2021 forecast to 7.4 percent, up from 6 percent.
In December, Forrester forecast that such spending would fall by 0.4 percent.
The upward revisions are due to the impact of the economic stimulus package President Biden signed into law in March, said Andrew Bartels, a research analyst at Forrester. “Activities are coming back again,” Mr. Bartels said. “And as they do so, [businesses] become buyers of technologies to support the reopening.”
Business and government tech spending is projected to rise to nearly $2 trillion.
