The Australian government is driving growth in the IT market through its purchase programme and various initiatives, such as a Cyber Security Strategy.
- The Australian ICT market is forecast to have considerable growth in the medium term, particularly in areas such as tablets, real-time enterprise software and data centres. The Australian government is an important factor, driving the IT market through its purchase programme and various initiatives, such as a Cyber Security Strategy and other initiatives to boost domestic software development.
- IT services sales are expected to grow from AUD 22.0 billion in 2016 to AUD 25.7 billion in 2019, with cloud services as the key growth driver.
- Computer hardware sales growth is expected to be relatively subdued due to market maturity, increasing from AUD 7.8 billion in 2016 to AUD 8.2 billion in 2019.
- Software sales are expected to increase from AUD 9.4 billion in 2016 to AUD 10.5 billion in 2019. Business application demand growth from small- and medium-sized enterprises as the software-as-a-service supply increases will be the main growth driver.
- Growth opportunities in the telecommunications subsector will remain severely limited in the years ahead due to the highly saturated nature of the market. Operators are now focusing on services, especially leveraging their investments into 4G networks.
- Our underwriting stance remains generally open for wholesalers/distributors and retailers, system integrators and IT software/services/hardware companies. The financial performance of ICT businesses should remain stable with banks willing to lend to companies. Protracted defaults and insolvency levels are low in this industry, however there have been two major business failures in the last 12 months.
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Market Monitor June 2016
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