International Data Corp. said Thursday that worldwide spending on traditional hardware, software, services and telecommunications gear will rise by 3.7 percent to $4 trillion by the end of the year.

But that represents a slight decline from growth of 4.2 percent in 2017, the analyst firm said. It also warned that growth will slow even further, to under 3 percent, in 2019 – less than the global domestic product’s growth – because of trade tariffs, rising interest rates, slower growth in China and the end of the capital spending cycle.

The forecasts came in IDC’s latest Worldwide Black Book, a quarterly analysis of the status and projected growth of the worldwide information and communications technology market in 89 countries.

In the report, IDC said annual spending on IT and telecommunications equipment will nonetheless exceed $4.5 trillion by 2022, with software and services related to “3rd Platform” — an IDC term for the current IT environment of mobile, social, cloud and big data — and “digital transformation” posting the strongest growth. Investments in hardware will be led by “hyperscale” cloud service providers’ spending on servers and storage infrastructure. Meanwhile, IDC expects weaker growth in PCs, tablets, peripherals, external storage systems and traditional outsourcing through 2022.

The declining growth will follow a significant rebound in spending on devices last year, which was driven by an improved economy and demand for PC upgrades. IDC said the smartphone market, in particular, has performed better than expected in terms of value, with price increases making up for slower shipments in most countries. Tablet sales have been less encouraging, but the market should see a return to modest growth over the next few years with more premium devices expected.

IT infrastructure spending rose 11 percent in 2017 and is expected to see annual growth in the range of 8 to 12 percent over the next five years, even as spending on devices is expected to slow down again.

“The infrastructure market is increasingly stable because a large proportion is now tied to the service provider model and overall demand for cloud services, which shows no sign of slowing down even in the event of a weakening economy,” said Stephen Minton, vice president of Customer Insights & Analysis at IDC. “To some extent, this spending will be more insulated against economic downturns than end-user capital spending, and therefore the IT market will be less vulnerable than it was in the past when any kind of GDP slowdown would translate into big declines for hardware spending.”

Nonetheless, he added, “economic risks are now higher than three months ago.”

As more providers switch to “as-a-service” business models, IDC said, the ICT market will become less dependent on economic cycles, which have traditionally been the cause of large swings in hardware demand. The analyst firm said the overall demand for cloud services shows no signs of slowing down, in spite of the economic risks it said will have an impact on hardware markets.

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