Larry Walsh
Channelnomics is adjusting its 2026 growth projections, raising its forecasts for both North America and Europe based on resilient partner confidence entering the third quarter, a strong rebound among European partners, and continued expectations for double-digit increases in revenue and profitability for the full year.
The Channelnomics Partner Confidence Index (PCI) for the third quarter found that North American and European partners expect revenue and profits to increase 10% to 14% in 2026. For North American partners, that expectation has remained consistent throughout the year. For European partners, the outlook has improved from the 6% to 10% growth expectation recorded at the beginning of Q2.
Overall partner confidence entering Q3 remained relatively steady in North America, declining modestly to 77.3 and staying within the “fair” range. In Europe, confidence rebounded from 78.2 at the beginning of Q2 to 80.8 entering Q3, stopping just short of the threshold that Channelnomics considers “good.”
In both regions, partners expressed strong confidence in their ability to grow revenue, improve profitability, reinvest in their businesses, expand staff, compete effectively, and adapt to changing market conditions. These indicators support the direction and relative strength of their growth expectations, even if the projections themselves shouldn’t be treated as precise forecasts.
At the same time, partners remain concerned about the broader economic and policy environment. Confidence that inflation would benefit their businesses weakened in both regions, and confidence in government economic policy declined significantly. Partners are also contending with the economic effects of the war in Iran, geopolitical instability, higher energy and technology costs, persistent memory-chip shortages, and the increasing expense associated with artificial intelligence infrastructure and services.
Confidence in interest rates, however, did not deteriorate entering the third quarter. It remained relatively stable in North America and improved in Europe, although rates continue to create friction for customer purchasing decisions, financing, and larger capital-intensive projects.
In other words, partners remain confident in their ability to execute and produce results, but they’re less confident that the economic and policy environment will support those efforts.
Channelnomics has observed this pattern many times before. Partners are often more confident in their own prospects than in the external factors beyond their control. This creates an important paradox for vendors: whether partner execution and investment will outweigh the drag created by inflation, policy uncertainty, higher costs, and uneven demand.
Market analyst firms such as IDC, Forrester, and Gartner have placed IT market growth between 10% and 12%, broadly aligning with partner expectations. The top-line market outlook, however, is deceptive. Vendors directly tied to artificial intelligence, semiconductors, and data center infrastructure are benefiting substantially from the AI boom, while vendors in other categories are experiencing more moderate growth. Some product groups, including peripherals, printers, infrastructure software, and portions of the SaaS market, remain under pressure.
This means vendors and partners will not experience growth evenly. Much of the revenue expansion reported across the market is being driven by price increases, higher infrastructure costs, and spending concentrated in AI-related categories rather than broad-based increases in unit sales. Strong market growth at the aggregate level can therefore mask weaknesses in individual product categories and partner business models.
Channelnomics believes that the channel is growing at a robust pace, but not at the same level that partners project. History has shown that partner forecasts function more as a barometer of direction and relative strength than as a precise measure of actual growth. The higher the forecast, the stronger the eventual growth is generally likely to be, even if the final result falls below partner expectations.
Channelnomics expects the North American channel to grow between 6% and 8% in 2026, up one percentage point from the previous forecast range. The European channel is expected to grow between 5% and 7%, up two percentage points from the projection issued at the beginning of Q2.
While Channelnomics estimates remain below broader market projections and partner expectations, they still represent historically strong growth. That strength, however, won’t be evenly distributed. Vendors should expect partners to remain confident, active, and willing to invest, but also more selective about where they place their resources. The greatest returns will go to vendors that help partners convert resilient demand into profitable growth through clearer economics, stronger service opportunities, faster execution, and lower operational friction.
The PCI reports are complimentary for CiQ members. If you’re not a member but would like to read the full reports, reach out to us at info@channelnomics.com.