Spending on information technology by Irish businesses will grow by 3.5 per cent this year to reach €2.5 billion, according to a new survey.

This is only a marginal slowdown over 2007 growth rates, according to the fourth annual TeleTech survey.

iReach, the research company that carried out the survey, said that as technology investment has become more strategic for Irish firms, there were less pronounced shifts in annual spending.

"Due to economic concerns, global IT research analysts such as IDC and Gartner are predicting a downturn; however, we do not see a similar trend in Ireland in 2008," said Oisín Byrne, iReach managing director.

The firm said that a slowdown in spending on hardware will be offset by investments in business process outsourcing, managed services and software.

Software spending is forecast to increase for the first time after a three-year lull.