ICT labour market data collected from UK Government and private sources, including ICT share/market changes, company liquidations, employment effects and IT spending, makes e-skills UK believe this industry is returning to the black again. These conclusions mirror the upshots of a recent study by AMR Research suggesting that IT budgets will grow by 2 per cent in 2004, while Gartner expects figures to return to normal after a period of underspent.
Although it may be a little early for us to be promising an upturn within the ICT sector, this quarters collection of business / labour market statistics do appear to show that the market has at least bottomed out. There is a definitive improvement in the stock market for ICT shares and a stable, if not declining, incidence of company closures amongst ICT firms, says the latest e-skills Bulletin.
At the same time, ICT exports are up and private sector investment remains pretty much unchanged since the previous quarter. Couple this with a general improvement in the economic climate and add in some reasonably positive noises about future ICT sales and it would appear that the ICT supply fraternity are sitting fairy comfortably at this moment in time.
The London FTSE indices for the ICT industries all rose during the second quarter of 2003, with e-commerce in particular exhibiting exceptional growth over the period (up by 104 per cent). Growth figures for the other ICT indices were 21 per cent for both hardware and telecoms equipment, 24 percent for internet and 33 per cent for computer services.
The market value for ICT firms listed within the London Stock Exchanges techMARK series continued on an upward trend over the second quarter of 2003 with an overall average growth rate of 4.7 per cent registered for the quarter. Telecoms manufacturing firms in particular exhibited the largest percentage increase in market value (averaging 30 per cent over the quarter) followed by firms in the IT Service sector (a comparison figure of 12.5 per cent). The overall market value for ICT firms in the series now stands at 176 bn.
Average return on capital employed by UK industry continues to fall with the all industry average slipping below 6 per cent in the first quarter of 2003 the 16th successive quarterly decline registered by Experians Quarterly Health Check.
Profitability within the ICT sector also fell over the previous quarter most notably amongst IT firms where the Return on Investment slipped below the all industry average for the first time during Q1 2003.
Office for National Statistics (ONS) data for UK trade in ICT services showed a trade surplus of 705m for thr first quarter, an increase of 23m (3 per cent) over the previous three months. The UK trade position was helped by increases in the exports of telecoms and IT services (up 64m and 27m, respectively).
Redundancies within the ICT industry sector (all staff made redundant from an ICT firm irrespective of their role) fell significantly during the second quarter from 14,000 to 10,000.
Over the same period, the overall number of ICT staff made redundant in the UK (those working in ICT firms or in the ICT function of a non-ICT firm) rose slightly(the second quarter increase) from 10,000 to 12,000.
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