CIOs put together for recession with higher price management

Practically 60% of CIOs imagine a recession this 12 months is probably going or already underway, in response to a research from Boston Consulting Group (BCG). Its newest CIO spending survey, carried out in April 2025, discovered a pointy shift in sentiment. BCG famous that the introduction of tariffs and the danger of an financial slowdown are driving IT leaders to tighten budgets and reprioritise investments.

When BCG checked out IT funds plans for the 12 months, previous to the tariff bulletins, greater than three-quarters of IT leaders stated they’d been planning to extend their budgets by a mean of 4%. Following the introduction of recent tariffs, BCG discovered that these planning to extend their budgets had declined to simply 56%, and their anticipated common improve fell to 2.4%.

The survey of 313 IT leaders throughout North America and Europe discovered that 58% of these polled are planning to place in place price management measures. Whereas 44% are planning to delay discretionary initiatives, 47% intend to put money into synthetic intelligence (AI) and automation. The truth is, 60% say they plan to deploy AI to mitigate the affect of tariffs.

BCG discovered that CIOs are additionally revising their longer-term sourcing methods to organize for potential commerce disruptions. Along with sustaining price controls and boosting AI investments, it reported that round 40% anticipate to reassess their international sourcing combine and renegotiate provider contracts over the subsequent 12 months.

When requested when they’re prone to resume IT initiatives which were placed on maintain, the bulk (45%) anticipate to restart them inside six to 12 months, 10% anticipate to delay initiatives by a 12 months, and 5% are not sure and will cancel these initiatives.

BCG famous that the decline in IT spending depends on how companies anticipate the tariffs to affect them. The research discovered that industrial items, retail, and journey and tourism face the most important slowdown in IT budgets, pushed by tariff publicity and elevated strain on international provide chains. Monetary providers, healthcare, and tech and media, in the meantime, anticipate smaller declines in progress, as they’re much less instantly affected by tariffs and coverage adjustments.

“Tariffs and recession considerations are having ripple results throughout IT budgets,” stated Clark O’Niell, managing director and companion at BCG. “{Hardware} prices are rising, whereas software program and providers firms are going through decreased spending from clients affected by tariffs and broader financial challenges.”

Areas the place IT leaders have reduce on spending embody storage (42%), IT operations and administration (42%), and server infrastructure (45%).

On condition that some IT leaders plan to proceed to put money into AI and automation to handle long-term price reductions by means of productiveness enhancements, there’s a danger that those that don’t make investments will fall behind.

BCG’s research discovered the concentrate on prices is going on most markedly amongst corporations with low to medium ranges of AI maturity. Based on BCG, such organisations are much more prone to concentrate on just a few speedy cost-cutting actions and undertake a wait-and-see stance towards any bigger structural adjustments that may ship strategic benefit in the long term.