European and American IT budgets are being restricted due to the current economic climate, after it was revealed that many companies were spending less or making cuts, according to research.

Industry analyst Forrester understood that 43 per cent of big businesses in the west were affected by changes, with 70 per cent of companies admitting to renegotiating for cheaper deals with suppliers.

John McCarthy, the vice-president and principal analyst at Forrester, stated that there was little proof of "across-the-board" slowdown, with demand for IT support not dropping significantly and other factors playing a large part in individual budget cutbacks, such as industry and geography.

"With regard to the services sector, the slowdown has firms renegotiating rates, being more selective in choosing vendors, and examining spending plans more thoroughly, but they are still expecting to pay more for services," Mr McCarthy added.

Today, it was revealed by MenaFN that spending on IT support and services in Bahrain was set to reach $400 million (£227 million) by 2012.

More than half of small businesses (53%) believe that the most important benefit of outsourcing is guaranteed response times for IT support, London based Connect conducted the research in 2007.