IT Spending By MEA Manufacturers To Grow 40% By 2018

IT spending by manufacturers across countries such as Saudi Arabia, Turkey and South Africa is estimated to grow almost 40 per cent over the next five years, according to a report from International Data Corporation (IDC).

The growth is predicted to reach eight per cent in 2015, the highest in the five-year period of 2014 -2018 while the compound annual growth rate (CAGR) is forecast to grow 6.8 per cent for the 2013-2018 period.

The report said that the lower IT spending growth in the hardware sector will be offset with growth in the IT services and software segments, which will expand at CAGRs of 9.4 per cent and 9.3 per cent respectively during this period.

IDC attributed the growth in IT expenditure to a favourable GDP growth outlook, adoption rate of 3D platform technologies, increasing awareness of IT threats and a shortage of skilled IT professionals in the region.

“A steady flow of IT spending will be delivered by a core group of large process-oriented manufacturing industries,” said Martin Kuban, lead analyst at IDC Manufacturing Insights, CEMA.

“However, the more interesting part of the market to watch will be the range of smaller and younger sub-industries that are in pursuit of progressive manufacturing and IT strategies.”

The report noted that increasing investment from sectors such as aerospace and defense along with the pharmaceutical industry has further contributed to the growth of the IT manufacturing business in the region.

In addition, IDC said that 3D platform technologies are becoming increasingly popular in the MEA manufacturing sector pushing up IT spend among firms while mobility and big data analytics are also forecast to have an impact on the regional manufacturers.

Gulf governments, especially the UAE have been investing in smart services, boosting expenditure on the IT sector over the last few years.

A recent IDC survey showed that business IT spending in the UAE is forecast to reach $3.46 billion in 2014, growing 8.3 per cent year-on-year.

The public sector will account for a major chunk of the spend with the government predicted to spend around $1.12 billion, constituting around 24.3 per cent of total IT expenditure.

The rise in expenditure is primarily driven by official initiatives to offer more government services online and on mobile platforms, the report added.