Boston, MA -- (ReleaseWire) -- 10/09/2012 -- BMI View: Slovenian IT spending is expected to reach US$949mn in 2012, with growth of -3%, in US dollar terms, compared with 2011, as the market continues to feel the effects of the economic crisis. IT spending remains below pre-2008 levels as a result of Slovenia's worst recession in 20 years, with hardware particularly affected. Fiscal austerity measures domestically and in the eurozone will continue to weigh on demand for IT products and services. In 2011, IT services vendors reported a slightly improved situation in the Slovenian market, with increased demand, but strong price sensitivity. The fundamentals of rising incomes in a context of below EU average PC penetration mean this small IT market should advance at a mid single-digit compound annual growth rate (CAGR) over the 2012-2016 forecast period. However, IT spending growth depends on business and consumer confidence in a sustained economic recovery.
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Headline Expenditure Projections
Computer hardware sales: US$494mn in 2011 to US$470mn in 2012, -5% in US dollar terms. Forecast in US dollar terms downwardly revised due to analyst modification following a contraction in Q411 and continued business caution in corporate and SME segments.
Software sales: US$205mn in 2011 to US$204mn in 2012, +0% in US dollar terms. Forecast in US dollar terms downwardly revised due to analyst modification and large enterprises still account for about half of the spending on enterprise application solutions (EAS) in Slovenia.
IT Services sales: US$279mn in 2011 to US$275mn in 2012, -1% in US dollar terms. Forecast in US dollar terms downwardly revised due to analyst modification, but in the medium term the IT services market is set to expand as Slovenian organisations upgrade IT systems to gain or maintain competitive advantage.
Risk/Reward Ratings: Slovenia's score was 51.1 out of 100.0. Slovenia ranks ninth in our latest Europe RRR table, ahead of Hungary, and Romania, but behind other relatively new EU accession states such as the Czech Republic and Poland. The country actually ranked a low 12th for its IT Market score of 35, but its overall rating was boosted by a relatively high Country Risks score of 60.
Key Trends & Developments.
- BMI expects Slovenian IT spending growth to decelerate in 2012 with another difficult year in prospect for IT vendors. The trading environment is still challenging, with only a mild recovery expected in 2012. Private demand, company investment and government expenditure all face headwinds over the coming quarters.
- Despite increased IT budgets for Unicredit and other organisations in 2011, even the financial services and banking sector remains in cautious IT investment mode. However IT services companies are expected to continue to benefit from IT projects tendered across various sectors, including education, retail and financial institutions.
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