Fears of a UK recession won't hit technology investment, according to the National Computing Centre (NCC), which claims spending on IT is set to grow faster than the rest of the economy.

The NCC asked 120 UK companies about their spending plans and found 58 per cent of the respondents predicted an above-inflation increase in IT expenditure over the year. The companies had an average turnover of £267m and an average annual IT budget of £6.25m.

The NCC survey contrasts to research by analyst firm IDC which painted a grimmer picture for IT spending, pointing out that server expenditure this year could fall. And Gartner warned companies to start cutting IT costs now, before a recession hits.

According to the The Benchmark of IT Spending 2008 survey, the median growth rate in IT expenditure reported is 4.9 per cent, against January's CPI figure of 2.2 per cent, with the construction and health sectors predicting the highest growth.

The vendor most likely to benefit from this is Microsoft, according to respondents, as many businesses plan to move to the Windows Vista operating system. Although Windows XP currently dominates the marketplace with 71 per cent of respondents using it, in two years time Vista will be used in 75 per cent of responding organisations, the survey estimates.

"Users have played cautious with Vista, letting a small band of early adopters iron out any problems," said Stefan Foster, managing director of NCC. "At the same time many organisations are now approaching their desktop refresh cycle and want to exploit enhancements in Vista and Microsoft Windows Server 2008."

The number of laptops in use is also set to increase by 57 per cent in the next two years, while over the same period respondents expect the number of PDAs to grow by 134 per cent. In contrast, the aggregate number of desktops is expected to decline by two per cent.

Companies are also dedicating a sizeable part of their budget to virtualisation and storage area networks, according to survey responses. In communications, voice over IP remains the most popular investment.

Typically operational spending averaged 39 per cent of total IT expenditure while staff costs formed 35 per cent of companies' budgets. Development and capital spending was 20 per cent.

26 per cent of respondents were spending on outsourcing processes and activities offshore, and 31 per cent plan to do so in two years' time. But in-house IT is also on the increase, with the median level of IT staffing set at 29.4 IT staff per 1,000 end users, an increase of 1.3 compared to the previous survey. But there is significant variance between sectors.

Foster said: "We hear talk of a recession, but the Benchmark results indicate that IT purchasers are remaining confident about future economic conditions; they are making sure that their businesses have the right technology to deliver growth over the coming years, but they are not over optimistic."