Tuesday 11 August 2009

The UK SITS market - It’s worse than we thought (but not that much)!

As we had feared when we published our inaugural MarketViews UK Forecast report back in February, UK SITS (software and IT services) spending is declining more steeply than anticipated as organisations not only halted ‘discretionary’ projects but also pulled back ‘keep the lights on’ spend.

In conjunction with our research partners, PAC, we have therefore slightly downgraded our UK SITS market forecasts, though compared to some other analyst firms, our changes are relatively minor. We now expect that ’top line’ UK SITS spend will decline 1.3% in 2009 vs the 1.0% decline we forecast in February. In real terms (i.e. excluding inflation, assumed at 1% this year), the UK SITS market will contract by 2.3%, though this is still ‘better’ than the 4.3% UK GDP decline forecast by the IMF. The rebound will also be more muted, with the UK SITS market not expected to return to growth in real terms until 2011, and then by under 1%.

Our completely revised forecasts for the UK SITS market are now available in our new MarketViews Forecast Update note in the subscriber-only section of our website. If you are not yet a subscription service client you should know the drill by now – contact Puni Rajah (prajah@techmarketview.com) and she will give you the details.

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