Weakening exports to China could slow Australian tech spending: Forrester

Global tech market to increase more than 5 per cent in each of next two years

The Australian tech market is expected to grow at a slower pace than the global tech market for the next two years, according to Forrester.

In a forecast released today, Forrester predicted the global tech market would grow 5.3 per cent to $2.3 trillion this year. In 2016, the market will grow another 5.9 per cent to $2.5 trillion, it said.

Australia’s individual tech market growth rate will lag behind, it said.

“Worries in Australia about weakening exports to China … will hold tech spending growth to low single-digits in 2015, before better economies in 2016 lift tech spending growth to 4.5% in Australia…” Forrester analyst Andrew Bartels wrote in the report.

The overall Australia economy, as measured by gross domestic product (GDP), is expected to expand by 2.5 per cent or more annually over the next two years, Forrester said.

In 2015, the top five countries for tech growth will be India (9 per cent), China (8 per cent), Israel (7.9 per cent), Sweden (7.8 per cent) and the US (6.3 per cent), said Forrester. Brazil could move into this group in 2016 because it is hosting the Summer Olympics, the research firm said.

Forrester predicted that Asia Pacific’s tech market will grow by 4.8 per cent in 2015 and 5.4 per cent in 2016.

Software is expected to play a major part of the global tech growth, representing $677 billion of total tech budget spending in 2016, the report said. In contrast, computer equipment will represent only $412 billion of spending in 2016, Forrester said.

Business and government purchases of software in US dollars will grow 7.1 per cent in 2015 and 9.2 per cent in 2016, Forrester said. Purchases of tech consulting and systems integration services is expected to grow 5.1 per cent in 2016 and 6.9 per cent in 2016.

“Demand will be strongest for software — especially for analytics and cloud apps — and related services but weaker in hardware and outsourcing, creating savings opportunities,” wrote Bartels.

“New project spending will be strong, much of it for technologies that support the business technology agenda for winning, serving, and retaining customers.”

Adam Bender covers telco and enterprise tech issues for Computerworld and is the author of dystopian sci-fi novels We, The Watched and Divided We Fall. Follow him on Twitter: @WatchAdam

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