Economic Crisis Response: Asia/Pacific (Excluding Japan) Manufacturing IT Spending 2008-2012 Forecast Update

This forecast update is in response to the current global economic meltdown that is affecting manufacturers in Asia/Pacific (excluding Japan) or APEJ, and in turn taking its toll on the IT spending in the manufacturing sector.

Every year, Manufacturing Insights produces a five-year APEJ Manufacturing IT Spending Forecast, the last one published in May 2008. In that report, we made our estimate of future IT spending, based on the the-then situation of the APEJ economies and surveys of Asia manufacturers' on IT investment trends. However, in 2H08, global and regional economic condition started deteriorating drastically, spurring the need for an interim forecast update.

Shrinking order book for export-oriented economies like China, tighter credit markets, and a lack of consumer confidence reflecting in a drop in discretionary spending - all contributing to the APEJ manufacturers' woes, prompting them to reduce workforce, cut costs and overheads, and/or stop production for significant durations. IT spending, along with operational costs, is one of the areas that we see taking a hit due to weak corporate sentiments and outlook.

Our recent analysis shows that manufacturers in the APEJ region, in general, will tighten their belts in terms of IT spending, and will try to leverage existing assets to deliver maximum value to their businesses.

In this perspective, we present the updated forecast as of January 2009, compared with May 2008, in terms of market size, short-term outlook for IT spending growth (2009 over 2008), and the revised 2008-2012 forecast and compounded annual growth rate (CAGR), by subregion, by vertical, and by broad IT category.