European tech markets to see significant decline due to Brexit: European tech markets will see growth slow in 2020, according to Forrester for the European tech market as a whole and for tech markets in the eight largest countries. European and government tech goods, software and services markets will decline by 0.3% in 2020, with the largest declines in tech markets in Italy and the United Kingdom offsetting very slow growth in France, Germany, the Netherlands, Spain, Sweden and Switzerland.
The slowdown in the European tech market in 2020 is a shift from the decent growth in 2018 and 2019. In 2018, the European tech market grew by 3.5% from 2017. Based on data from the first and second quarters of 2019, European tech markets are forecast to grow at a similar rate (3.7%) in 2019. This forecast is a significant improvement from the initial forecast a year ago of 0.8% growth in 2019. However, the main reason for this better performance is the delay in the timing of Brexit, the United Kingdom’s withdrawal from the European Union, from late March 2019 to late October.
With Brexit either this month or by the end of January 2020, UK economic growth and therefore UK tech growth will decline in 2020. A no-deal Brexit would make the downturn even worse. Meanwhile, Germany and other European countries are feeling the side effects of the US- China trade war and political uncertainties in France, Italy and Spain, and their economic slowdown will dampen tech growth in most European countries.
Despite the forecast for a decline in technology spending in the market in 2020, there are bright spots amidst the uncertainty and economic struggles. Software and tech consulting companies will show steady growth rates in 2019 and 2020. The Nordic region will continue to show the strongest technology growth in Europe, driven mainly by Sweden’s still-growing economy and its openness to emerging technologies. The French and Dutch technology markets will perform better compared to the German, Italian, Spanish and Swiss technology markets.
