Worldwide IT spending is forecast to total $3.350 trillion in 2010, an increase of 3.9% compared to $3.225 trillion in 2009, according to Gartner.

Gartner has lowered its outlook for the IT industry from the first quarter of this year when it forecast worldwide IT spending to grow 5.3%, primarily due to the devaluation of the euro versus the US dollar since the beginning of the year.

Worldwide computing hardware spending is expected increase by 9.1% to $365bn in 2010. In software, IT services and telecommunications, the appreciation in the value of the US dollar, especially against the euro, has acted to dampen US-dollar-denominated growth in 2010.

According to Gartner, software spending is expected to increase by 3.1% to $229bn in 2010, compared to $222bn last year. Spending on IT services is expected to increase by 2.9% to $786bn in 2010 while Telecom spending is expected to increase by 3.4% to $1,970bn in 2010.

Richard Gordon, research vice president at Gartner, said: "The European sovereign debt crisis is having an impact on the outlook for IT spending. The US dollar has strengthened against the euro during the second quarter of 2010, and this trend will likely continue in the second half of 2010, which will put downward pressure on US-dollar-denominated IT spending growth."

Mr Gordon, said: "Longer-term, public-sector spending will be curtailed in Europe as governments struggle to bring budget deficits under control during the next five years and to reduce debt during the next 10 years.

"Private-sector economic activity will also likely be hindered because of the direct impact of austerity measures on key government suppliers and the indirect impact caused by the ‘ripple effect.’ An effective policy response will be critical to stimulate investment in general and in IT in particular.

"The computing hardware sector continues to benefit from a healthy PC sector, which accounts for two-thirds of total spending in this area, and we expect PC shipments to remain robust throughout 2010 and 2011. Consumer shipments will continue to be powered by strong mobile PC uptake, while professional shipments will be buoyed by a new replacement cycle and migration to Windows 7."