The fourth quarter: record technology spending, cautious hiring and the return of control

In July, Gartner raised its forecast for worldwide IT spending in 2026 to $6.37 trillion, an increase of 14.2% on the previous year. Spending on data center systems was expected to reach $822 billion, up 62.5%, and spending on cloud infrastructure services $287 billion, up 29.3%. John-David Lovelock, a distinguished vice president analyst at Gartner, described the buildout in unusually large terms: “Building compute capacity for AI is the largest infrastructure project ever attempted by humanity.” [1] A month later, the US Bureau of Labor Statistics reported that the information sector, which includes much of the American technology industry, had lost 23,000 jobs in August, even as total payrolls rose by 162,000. [2] The money being spent on technology has never been larger, while the hiring that accompanies it remains highly selective.

The third quarter sharpened that contrast across all four regions we cover. Interest rates began rising again in the United States and Europe, the conflict involving Iran flared again after a summer of fragile truces, and employers responded by protecting the roles that keep their businesses secure, compliant and financially controlled, while postponing much of the rest.

The Middle East had the most turbulent quarter, and recovered faster than many expected. The interim ceasefire agreed in June broke down on July 8, when President Trump said of the truce, “For me, I think it’s over.” [3] Iranian attacks on shipping disrupted the Strait of Hormuz again in mid-July, and on September 7 US forces struck Iranian tankers, pushing Brent crude to $97.34 a barrel. [4][5] Yet business activity in the UAE strengthened through the summer. S&P Global’s survey showed the private sector index rising to 52.7 in July, with hiring resuming after June’s steep job losses, and to 55.3 in August, the fastest growth since 2024. David Owen of S&P Global Market Intelligence said the economy had “shifted decisively into a higher gear.” [6][7] Saudi Arabia’s index rose to 53.8 in August, with staff numbers increasing for a second month. [8] Dubai received 869,000 visitors in August, its highest monthly total since February, and Emirates had restored 97% of its network. [9] First Abu Dhabi Bank reported a 1% rise in first-half profit to Dh10.73 billion, with lending up 7%, and its chief financial officer, Lars Kramer, described a record second quarter. [10]

Cooper Fitch’s Gulf Employment Index for the second quarter found hiring down 3% across the region, but hiring in investment finance rose 6%, finance 5%, data and AI 4% and cybersecurity 2%, while software and cloud declined. [11] Robert Walters reported a 16% fall in Middle East net fees in the first half “against the backdrop of the regional conflict.” [12] Ian Giulianotti of Nadia Global identified the question that will shape the fourth quarter: “The big test is how many people who left during the summer decide they aren’t coming back.” [13] The conflict has also made security a far more immediate concern for Gulf employers. In September, Dr. Mohamed Al Kuwaiti, head of the UAE Cybersecurity Council, said that “whenever we see a kinetic attack on any of the ports or on any refineries or the airport, there is always a cyberattack towards many of those entities,” and The National reported that the country had faced 640,000 cyberattacks in a single day in mid-September, with financial services among the targets. [14][15]

North America is dealing with a different kind of uncertainty. The US economy added 162,000 jobs in August, well above forecasts, and unemployment held at 4.1%. [2][16] The Federal Reserve held rates at 3.50% to 3.75% in July, with three members voting for an increase, and in September, at the first meeting under Chair Kevin Warsh, raised them by a quarter point to 3.75% to 4.00%, a move Warsh described as “removing accommodation.” [17][18] Canada lost 42,000 jobs in August, pushing unemployment to 6.4%, after the United States imposed 50% tariffs on Canadian goods on August 22. [19] Higher borrowing costs and trade friction make discretionary hiring harder to justify, and the technology sector’s job losses suggest that companies are paying for AI infrastructure partly by holding down headcount elsewhere.

Europe’s labor markets are showing the first signs of a turn. The European Central Bank raised its deposit rate to 2.50% on September 10, and the Bank of England held its rate at 3.75% on September 17, with three of nine members voting for an increase. [20][21] In the UK, the KPMG and REC Report on Jobs for September recorded the first rise in permanent placements since late 2022, with permanent vacancies in accounting and finance rising and technology leading demand for temporary staff. Jon Holt, KPMG’s group chief executive, said that “confidence is beginning to return to the market,” and Maxine Bligh, interim chief executive of the REC, said that “the job market is starting to power up again after employers had permanent hiring on the standby button.” [22] The starting point remains weak, with UK unemployment at 4.9% and vacancies at their lowest level since 2014. [23] The eurozone’s composite business index rose to 53.1 in September and Germany’s ifo business climate index improved to 89.9, while the postponement of the EU AI Act’s high-risk obligations to December 2027 has given employers more time to prepare for rules on AI in hiring and workforce management. [24][25][26]

Asia’s labor markets remain tight overall, though not in every function. Singapore’s Ministry of Manpower reported that employment rose by 11,400 in the second quarter and unemployment stood at 1.9%, but retrenchments rose to 4,620, led by manufacturing, information technology and financial services. [27] Hong Kong’s unemployment rate edged up to 3.8% for June to August. [28] The Bank of Japan’s Tankan survey, released on October 1, showed large manufacturers’ sentiment improving to 24 and large non-manufacturers’ easing to 35, while firms continued to report a marked shortage of staff. [29] Japan cannot find enough people, while Singapore and Hong Kong are restructuring financial and technology teams even as they hire specialists.

Gartner’s latest research describes the work that will dominate technology and finance agendas for the rest of the year. On September 30, it published its recommended actions for chief information security officers, reporting that 54% of organizations had no defined way to limit what AI agents can access, 76% of security leaders ranked AI-driven discovery of vulnerabilities among their top ten emerging risks, and 51% had not started preparing for post-quantum cryptography. Christopher Mixter, a vice president analyst, said security leaders had “a career-defining opportunity to guide executive decision making through this period.” [30] For finance leaders, Gartner reported in September that low AI literacy had overtaken difficulty hiring talent as the main barrier to success with AI, and Marco Steecker, a senior director analyst, argued that “CFOs must adopt more deliberate portfolio management” of their AI investments. [31]

The evidence across the four regions points in one direction for the fourth quarter. Employers will keep investing heavily in technology, but they will staff it carefully and favor roles that reduce risk over roles that expand capacity. In technology, that means security engineers and architects, particularly those who can govern AI agents and plan for post-quantum migration, along with data, AI and infrastructure specialists who can make expensive systems produce returns. In finance, it means controllers, treasury and risk professionals, compliance specialists, and finance leaders who can manage an AI portfolio with the same discipline as a capital budget.

Looking ahead, I expect the Gulf to continue recovering through the fourth quarter if the conflict stays contained to sporadic incidents, with hiring led by finance, cybersecurity and data, and with employers watching closely whether the people who left in the summer return. A renewed escalation would pause expansion hiring again, but the experience of the spring suggests that security and finance roles would continue. In North America, I expect selective hiring under higher interest rates, with technology employers continuing to trade general headcount for specialist AI and security talent and Canadian employers cautious while the tariff dispute lasts. In Europe, the UK’s early recovery in permanent hiring should continue if inflation does not force further rate rises, while German employers remain hesitant. In Asia, Japan’s shortage of workers will keep demand strong across functions, and Singapore and Hong Kong will continue to hire compliance and technology specialists while restructuring elsewhere.

For employers, the people in highest demand at the end of this year are the same in Dubai, New York, London and Singapore: specialists who can secure systems, control costs and make AI work under scrutiny, most of whom are employed and comparing offers across markets.

Lovelock’s description of AI infrastructure as the largest project humanity has attempted may well prove accurate. Projects of that scale are built by large numbers of people, but they are secured, governed and paid for by a much smaller group of specialists, and as 2026 ends, that smaller group is where employers in every region we cover are competing hardest.

Sources

1. Gartner, Gartner Forecasts Worldwide IT Spending to Grow 14.2% in 2026, Totaling $6.37 Trillion, July 27, 2026.
2. US Bureau of Labor Statistics, The Economics Daily, Payroll employment rose 162,000 in August 2026, September 10, 2026.
3. WLOS, Trump says Iran ceasefire is over after US strikes, July 8, 2026.
4. Amundi, Rising tensions around fragile ceasefire unsettle oil flows, inflation risks and markets, July 15, 2026.
5. Angel One, Crude oil prices rise as Middle East conflict deepens supply concerns, September 8, 2026.
6. Gulf News, UAE PMI rises to four-month high after June slump, hiring resumes, August 5, 2026.
7. Khaleej Times, UAE non-oil businesses record fastest growth since 2024, September 3, 2026.
8. Mubasher, Saudi non-oil business surges to six-month high as PMI hits 53.8 in August, September 3, 2026.
9. Gulf News, Dubai visitor numbers hit highest level since February with 869,000 arrivals, September 14, 2026.
10. Gulf News, FAB H1 net profit rises to Dh10.73 billion, lending grows 7%, July 23, 2026.
11. Khaleej Times, GCC hiring falls 3% in Q2 as Strait of Hormuz disruption bites, July 14, 2026.
12. Robert Walters, 2026 half year results, July 30, 2026.
13. AGBI, UAE hiring picks up but post-summer test looms, August 2026.
14. Euronews, Every Iranian strike came with a cyberattack, UAE cyber chief says, September 17, 2026.
15. The National, UAE companies urged to remain vigilant on cyber attacks, September 22, 2026.
16. Babypips, US jobs August 2026: nonfarm payrolls beat forecasts, September 4, 2026.
17. PCBB, FOMC July 2026, July 29, 2026.
18. MUFG Research, September 2026 FOMC recap, September 16, 2026.
19. Retail Insider, Canada loses 42,000 jobs in August: Statistics Canada, September 2026.
20. Newsquawk, ECB deposit facility rate decision, September 10, 2026.
21. MTS Insights, Bank of England rate decision summary, September 17, 2026.
22. KPMG UK, KPMG and REC UK Report on Jobs, September 2026, September 7, 2026.
23. Babypips, UK unemployment August 2026, August 18, 2026.
24. FXStreet, Eurozone flash PMIs for September, September 23, 2026.
25. Global Banking and Finance Review, German business sentiment grows, September ifo survey finds, September 24, 2026.
26. White & Case, EU AI Omnibus enters into force, amending the AI Act, August 4, 2026.
27. Ministry of Manpower, Labour Market Report, Second Quarter 2026, September 21, 2026.
28. Human Resources Online, Hong Kong’s unemployment rate edges up to 3.8% in June to August 2026, September 18, 2026.
29. Bank of Japan, Tankan, September 2026 survey, October 1, 2026.
30. Gartner, Gartner Identifies Top Five Actions for CISOs to Take by End of 2026, September 30, 2026.
31. Gartner, Gartner Says CFOs Must Take a More Disciplined Approach, September 24, 2026.