TechMarketView has predicted that the UK software and IT services (SITS) market will not return to growth until 2013. The analyst had originally forecast that there would be a decline, in real terms, of three years from 2008 to 2010.
“We are now forecasting that run of declines will now extend to 2012. Indeed, the forecast return to growth in 2013 is so meagre that even that must be in doubt,” said Richard Holway, chairman of TechMarketView.
TechMarketView’s predictions includes an in-depth analysis of the effect of the government’s spending review next month. The analysts estimate that more than 10 percent of annual SITS spend will be cut from the public sector between 2009 and 2012, with central government’s spend reduced by nearly 30 percent.
“This is the largest and most severe reduction in our UK SITS forecasts in my 25 years as an analyst,” said Holway. “The resulting downturn will be the longest and most severe in the 50 year history of IT.”
Holway added that a trend he forecast in 2002, that the UK would do far more IT but spend much less doing it, is now an “established” trend for at least the next decade, “probably forever”.