NEW YORK, Jan. 10, 2017 /PRNewswire/ -- Includes 3 FREE quarterly updates
The immediate impact of the Brexit referendum was in the hardware segment as sterling depreciation transferred into higher retail prices, but in 2017 uncertainty is forecast to filter through into weaker software and services spending growth as enterprise investment is delayed, deferred or scaled back. The negative impact should however, only be felt at the margins, and our core scenario is for the IT spending to continue to grow throughout the forecast period. Downside is elevated, particularly as internal Conservative party politics raises the prospect of a 'hard Brexit' that could prioritise immigration controls over financial services passporting and unrestricted single-market access. Such an outcome would result in a downward revision of the IT spending outlook, with the treatment of financial services under redefined UK-EU relations a key factor for the software and services outlook.
Latest Updates & Industry Developments
- Computer Hardware Sales: GBP13.7bn in 2016 to GBP13.9bn in 2020, CAGR of 0.4% in local currency terms. After a multi-year contraction we expect a return to modest growth from 2018, but sterling depreciation, enterprise investment and potential cannibalisation of tablet spending by smartphones mean risks are concentrated to the downside.
- Software Sales: GBP14.8bn in 2016 to GBP17.0bn in 2020, a CAGR of +3.5% in local currency terms. Core scenario will see momentum regained from 2018 as economic and political stability returns, but major downside should a loss of passporting status occur and see investment scaled back and/or moving jobs to other European financial centres.
- IT Services Sales: GBP29.9bn in 2016 to GBP34.6bn in 2020, CAGR of +3.7% in local currency terms. Technology trends are favourable, such as adoption of cloud computing and smart services, while public sector spending could be boosted if fiscal restraints are eased in response to economic uncertainty following the Brexit vote.
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