Stocklytics.com figures reveal that the annual growth rate for IT services spending will slump to 4.5 per cent by 2029, a sharp drop from the double-digit rises that kept the industry fat for most of the last five years.

The rot has already started. In 2023, companies splashed out $1.29 trillion (€1.21 trillion) on IT services, a whopping 15 per cent rise in a year. In 2024, they blew $1.42 trillion (€1.33 trillion), but growth slowed to 9.4 per cent. This year, spending will top $1.5 trillion (€1.41 trillion), yet the growth rate has already dipped to 6.4 per cent.

According to Statista, by 2027 global IT services spending will hit $1.7 trillion (€1.6 trillion), but with a miserly 5.5 per cent growth rate. By 2029, the sector will crawl to $1.87 trillion (€1.75 trillion) with growth stuck at 4.9 per cent.

It is not just belt-tightening to blame. Economic uncertainty, soaring borrowing costs, squeezed budgets, and the never-ending US-China trade spat have all made tech bosses more cautious. Many are shelving grand projects and opting for cheaper, quicker solutions instead.

Even though overall IT spending is slowing, the average spend per employee is expected to jump by 26 per cent. In 2025, companies will spend $420 (€394) per worker. By 2029, that figure is forecast to hit $505 (€474). Businesses are still willing to pay for productivity, but they are not splurging on scale anymore.

The slowdown is hitting some regions harder than others. The US remains the biggest spender, set to drop around $3,100 (€2,910) per employee in 2025, rising to $3,800 (€3,566) by 2029. Growth there will still dip from 5.4 per cent to 4.6 per cent.

Europe is taking an even bigger smack. Growth will fall from 6.6 per cent to 4.2 per cent, thanks largely to strangling regulation and ballooning costs. European firms will still shell out about $1,380 (€1,295) per employee by 2029, around $250 (€234) more than today.

Asia, however, is where the brakes slam hardest. Companies there will cough up $152 (€143) per employee in 2025, rising to $190 (€178) four years later, but growth is set to nosedive from 7.8 per cent to just 4.9 per cent.

Unless some miracle fires up the global economy soon, IT service providers are in for a long, slow, and expensive slog.