APAC tech spending forecast to decline in 2013: Forrester

The technology markets in the Asia-Pacific region might still be growing, but when compared to the US dollar, spending will actually decrease compared to the rest of the world.
Written by Michael Lee, Contributor

Although the US market is set to be the main driver for global technology spending in 2014, the Asia-Pacific region is one of the only parts of the world to see a decline, according to Forrester.

From the research company's mid-2013 global tech market update report, the overall APAC region will grow by 4.3 percent, but with Forrester predicting an increase in the strength of the US dollar, the market will actually be in decline by 3.2 percent.

The blame is being placed with the Chinese and Indian markets in particular, where Forrester considers China's growth rate of 7.8 percent to be "subpar". China showed growth figures of 9.3 percent in 2011, and it has steadily decreased over the past few years, predicted to hit 7.4 percent in 2013.

While India's 2013 growth rate of 5.8 percent would not be as bad as in 2012, when it was 3.8 percent, it is still nothing compared to its recent 7.6 percent figure in 2011, the report notes.

The report expects the combined growth rate of India and China to worsen in 2013, dropping below 7 percent; however, by 2014, it expects the situation to begin improving.

After posting growth figures of 3.6 percent in 2012, Australia is forecast to drop back to growth rates of 2.5 percent in 2013. However, while acknowledging the decline, Forrester states that this rate of growth is still healthy for the country.

Japan appears to be a special case in the APAC region, due to its prime minister launching a raft of fiscal stimulus policies. Forrester believes this has arrested the decline of its growth rates, and predicts figures of 1.8 percent in 2013. For comparison, its growth was negative in 2011, at -0.6 percent, returning to a positive 2 percent this year.

Forrester warned Japanese CIOs that they should be cautious about the political situation when considering their tech spend, and be sure that the recent policy shifts are being taken seriously.

Australian CIOs should similarly be watching China to ensure that its economy doesn't slow too much before embarking on any spending.

Chinese CIOs, on the other hand, were told to consider how much they want to reduce their spending, given mixed signals on the rate of growth of its economy.

The only country that appears to be able to look forward to spending on more technology was India, where Forrester indicated that the country's technology slowdown through 2011 and 2012 should be easing up.

Editorial standards