IT sector rides out 'credit crunch' storm

Spending on IT equipment grew by nearly 9% in the first half of this year, according to a survey out today.

In apparent defiance of the effects of...

Spending on IT equipment grew by nearly 9% in the first half of this year, according to a survey out today.

In apparent defiance of the effects of the "credit crunch", the GfK IT Barometer survey says more than £5bn was spent - £400m more than in the same period last year.

The growth is put down to consumers' demand for mobile computers, coupled with a surge in sales of peripheral items, such as hard disc-drives, mice and keyboards.

The barometer, which tracks trends across the IT market, shows higher growth than that reported for last year.

The latest figures show that in the first six months of 2008, sales of laptops grew by 24% in value compared with last year. But sales of desktop PCs fell by 2% during the same period.

Corporate sales grew by only 4% in value in the period, but consumer sales jumped 18%, according to the survey. This suggests businesses are being more cautious than consumers during this rocky economic time, says GfK.

Anthony Norman, business group director at GfK, said, "We were expecting to see a slowdown in consumer IT spending in the first half of 2008, but this has not been the case. Consumers have continued to spend their disposable income on IT hardware and software.

"However, it is noticeable that in the corporate sector many businesses are listening to analysts' predictions on the current economic climate and have been careful about their IT spend."

But he added, "We must ask just how long the IT sector's performance can continue to remain positive in the face of difficult financial times."

Meanwhile, other figures also suggest the technology sector has so far ridden out the credit crunch. Although mergers and acquisitions (M&As) have fallen this year because of lack of availability of finance, M&As in the technology sector are proving resilient.

Last week saw software supplier Detica agree to a takeover by BAE Systems for about £538m.

And according to figures by Regent Associates, an M&A specialist that focuses on the IT sector, there were almost as many technology deals in Europe in the first half of 2008 as there were last year - 779 compared with 787.

M&A activity in the sector is underpinned by a view among buyers that stock markets are placing too low a valuation on technology companies.



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