Published on the 05/10/2009 | Written by Newsdesk
KPMG says local technology firms will benefit from the new positive economic outlook of American IT companies…
A survey showing that IT company confidence and turnover is expected to rapidly outpace economic growth in the United States spells good news for New Zealand’s IT companies, according to KPMG.
The survey of 130 IT companies in the US showed eight out of 10 executives expect business conditions in the technology sector to improve in 2010, with 78 percent expecting stronger revenue and 72 percent expecting improved profitability.
Two-thirds of senior technology executives said they thought their industry would fully recover from the current economic crisis ahead of the overall US economy. Silicon Valley-based executives were even more bullish with 77 percent expecting the technology sector’s recovery to outpace the U.S. recovery. About 43 percent of the technology leaders surveyed expect the US economy to recover after 2010 while 39 percent predict the economy will recover by next year.
KPMG technology partner Adrian Michael says for those New Zealand IT companies exporting to the US the survey gives real confidence that now there is a better market opportunity for their IT products and solutions.
“Most firms have now implemented cost cutting measures and while they will continue to be important, now is the time for New Zealand firms to make sure that their focus is outward and not inward,” Michael says.
“This survey shows that confidence is on the rise and that the market is looking to IT solutions to help drive the recovery. With new budgets in 2010 customers will have more ability to spend on IT capex and New Zealand technology companies should be right there to take advantage of that.”
The domestic market will also present new opportunities for IT companies, Michael says.
“Because the US economy is a leading indicator of future trends globally, it is reasonable to expect that New Zealand executives are going to be feeling more confident about the New Zealand economy. Anecdotally, many of our technology clients are telling us that they are confident about the economy and their prospects. No-one is expecting a boom but the mood is one of cautious optimism.”
Executives across a range of industries in New Zealand are now focusing on IT spending to maximise efficiencies and gain competitive advantage, he says.
“Many large IT projects have been delayed, but as companies get comfortable that the worst is past, purchase decisions will start to be made. The technology sector has driven productivity growth over the last 10 years and we believe that technology solutions will be even more important going forward in the digital era.”
