IT spending by European manufacturers exceeded $50bn in 1997, making it one of the largest and fastest growing sectors for hardware, software and IT services in the world. According to market researcher Datamonitor, European manufacturers spent $51.6bn on IT in 1997 and, by 2002, that figure should rise to $82.5bn. Although staff costs and hardware still account for the majority of IT budgets at European manufacturing companies, Datamonitor says that an ever increasing amount of the budget is going on services, especially outsourcing. There are, says Datamonitor, several reasons for this trend. The growing complexity of software packages; the move to online business practices; the use of internal intranets; and the upcoming Year 2000 and economic monetary union changes. As a result, expenditure on outsourcing by European manufacturers rose to $3.8bn last year, 7% of total IT expenditure. The largest European manufacturing market is Germany ($15.4bn), followed by France ($11.4bn) and the UK ($9.7bn). Combined, these three countries accounted for more than 60% of IT expenditure in this sector in 1997.
