ICT spending in Australia this year will be lower than expected, thanks to a slowing economy and political uncertainty, according to analyst firm IDC.
The growth rate of ICT spending has been on a steady decline, but the slowdown has been shown to be more significant in IDC's most recent Australian Vertical Markets Forecast report. IDC vertical markets analyst David So told ZDNet that the drop was due to the next federal election being just around the corner.
IDC's report, which comes out every six months, predicts that the country's ICT market will grow to AU$44.9 billion in 2013, reaching AU$47.8 billion by 2015.
The previous report had tipped ICT spending in 2013 to be AU$46.6 billion and AU$49.3 billion by 2015. This year was the first time it incorporated the forecast for 2016, for which the ICT spend figure was AU$49.5 billion.
"As opposed to previous periods, Australia has a higher risk profile in terms of the macro-economic environment right now," So said.
According to So, fiscal consolidation, political uncertainty due to the upcoming federal election, and the high Australian dollar all played a part in the lower ICT spend outlook.
Spending growth is expected to reduce across the board, he said. But banking, finance, and insurance is still the largest vertical in Australia in terms of ICT spend, which will hit AU$10.7 billion this year. Most of the major banks, including the Commonwealth Bank, Westpac, and NAB, are currently undergoing IT transformation projects.
So expects an increase in ICT spend in Australia after the election period, when the political environment is more stable.