Federal IT spending predicted to increase, despite decrease in defense budget

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Federal Information Technology (IT) spending will increase in the next five years even as overall defense spending declines, according to TechAmerica Foundation’s 46th Annual Vision Forecast released Monday.

TechAmerica’s five-year forecast of federal IT spending predicts an annual growth rate of 2.8 percent from $79.6 billion in fiscal year 2011 to $91.3 million in 2016. The 10-year forecast of defense spending shows a decline of 1.1 percent from $704 billion in fiscal year 2011 to $633 billion in fiscal year 2021.

“Both federal IT and defense spending are likely to run up against the realities of an uncertain economy, the federal debt and other pressures in coming years,” TechAmerica Foundation Chairman Phil Bond said in a statement. “In the face of reducing overseas deployment and federal budget pressures, we expect overall defense spending to drop, with the notable exception of IT programs.”

TechAmerica predicts the defense IT market will grow 1.8 percent from fiscal year 2011 to 2016, rising to $40.3 billion in current dollars.

New drivers of growth for IT budgets were identified as health care, energy efficiency and business intelligence.

The Department of Health and Human Services and the Department of Treasury are expected to top the list of fastest growing IT budgets, with five-year growth rates of 5.8 and 4.8 percent respectively.

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