Australia predicted IT growth

The Asia Pacific IT industry, and consequently electronics industry, is expected to register lower revenues due to the global economic downturn and terrorist attacks, with Australia expected to be one of the most affected countries.

International Data Corp estimate the region's IT business is expected to be $133 million by the end of 2001, compared with $131 million last year, a mere 1.3% growth.

Total IT spending in the region was expected to be $212 billion in 2003. In 2000, the region spent an estimated $90 billion on hardware, $14 billion on software and $28 billion on services.

"Our recent research indicates that IT budgets will be put in place next year at higher levels than they were this year. Spending against these budgets will be postponed until businesses are able to sense that the economy is turning around," said Piyush Singh, IDC Asia Pacific managing director.

The hardware sector will be especially hit, with a steep slide in the sale of PCs, servers, peripherals and workstations. Software sales will remain strong though, as this sector is still under-penetrated in several countries.

Australia will be one of the worst affected countries in terms of IT growth, IDC said. However, the services sector will remain buoyant as companies increasingly use external resources to manage and operate their IT systems. "This trend is fostered by the desire to cut costs as well as the persistent IT skills shortage in most countries," Singh said.

And as a result of the terror attacks, disaster recovery services, security solutions and the enterprise storage market will increase over the next year. "Data and application hosting services could also get a new lease of life," he added.

IDC now expects the region's economy to recover in second half of 2002 as opposed to the first quarter of 2002. By 2003, the market will be back on track with a year-on-year growth of 22%, IDC said. It expects a 13.5% growth next year as the regional technology sector recovers. "Companies cannot put off projects or upgrades forever so we expect spending to pick up by mid-2002," Singh said.

IDC called on companies to use the economic crisis as an opportunity to plan, reorganise, focus on their core markets, and invest for the rebound.