ICT spending forecasts revised down, but some growth opportunities to ease the pain

Peter Dinham
Tuesday, 10 March 2009 09:33

IT Industry - Deals

The tough economic conditions have slowed growth in ICT vertical markets in Australia with IDC today revising its forecasts down and now predicting the industry will reach a value of $46,939 million by 2012, not $47,830 million as forecast last year. But, there’s some upside on the horizon, with government forecasted to experience the fastest increase in ICT investment in the next few years as it acts to stimulate the economy.

In its analysis report titled Australia Vertical Markets 2009-2012 forecast and analysis, IDC has revised its verticals forecast compound annual growth rate from 4.0% to 3.6% over the period 2008 to 2012.

Melissa Martin, IDC’s senior analyst, IT spending and verticals, said today that in tough economic times, the natural inclination for companies was to put major transformational initiatives on hold and focus on tactical optimisation of business operations.

"However, in this slow ICT spending environment, it's more important than ever for suppliers to identify and focus their businesses towards key customers, new offerings and new vertical industries that will yield the greatest opportunities in order to make the most of the economic downturn."

Martin also cautioned that suppliers that pushed too hard on the brakes would not only limit their viability in the long term but also miss key growth opportunities in 2009.

IDC’s report says that ranking of the top vertical markets in Australia in 2009 remains unchanged, with banking, finance and insurance at $8,872 million and 21.1% of the business market; government at  $6,170 million and 14.7% and communications & media at $5,335 million and 12.7%.

Martin said, however, that the government, education and construction sectors were forecasted to experience the fastest increase in ICT investment in the next few years (with respective CAGRs of 6.1%, 5.0% and 4.7% in the forecast period) as the government aimed to stimulate the Australian economy by increased spending and incentives in these sectors.
 
She predicted that the vertical industries that will be the biggest losers in current economic times will be retail, transportation and business services, with a very large part of these industries in Australia producing or selling intermediary goods destined to be consumed by other industries.