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Since the beginning of 2022, small and medium-sized enterprises have exercised significant caution in their IT spending, given the economic challenges posed by inflation and interest rates. Measured quarterly, the IT spending sentiment among SMEs recorded by our SME Tech Trends surveys have been a net negative each of the eight quarters since the first quarter of 2022, dropping to its lowest point of -13 in the third quarter of 2022 (net values are calculated as the difference between positive and negative intent). It eventually showed some signs of recovery in Q3 2023 near the "net zero" mark, partially due to easing inflation and the end of interest rate hikes, and partially due to the advent of generative AI. While 2024 is projected to see recovery in IT spending among businesses big and small, our Macroeconomic Outlook, Organizational Dynamics 2024 survey looks at the IT spending sentiment among SMEs, the categories they are most likely to spend on over the next 12 months, and the primary drivers. If the current economic conditions persist, SMEs may see more pressure to spend on technologies such as automation and AI/machine learning amid pressure to get more work done from fewer employees.