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Freelance contractors will be among IT’s big losers in 2009 when the industry’s customers finally bow to fiscal pressures and nosedive it towards a recession. Any outfit that depends on contractors, like agencies, umbrellas and consultancies, will suffer next year, as the UK budget for software and IT services, including staff, will fall by up to 2%. This negative IT spending will particularly hurt outfits “involved with contractors” like “IT resources and staffing”, said IT analyst Richard Holway, explaining his bold predictions. But speaking to CUK, the ex-Ovum director yesterday pointed to 17% revenue growth at Xchanging, an outsourcer to financers, as proof that “some areas will grow dramatically.” “At the moment…any IT company, any outsourcer or any BPO [firm] that can go in there and say to a company ‘we can save your money, not only that but we can save you money this financial year’ …is doing very well,” he said. “But any technology company which is dependent on discretionary spend…, I believe that their outlook statements are looking much less healthy than they were a year ago or even six months ago.” He said software companies have already shown themselves to be less “resilient” than the IT industry as a whole, because new orders, upon which they rely for growth, have suffered. “[But] the real problem with technology is not in the first six months of this year, maybe is not going to come in even the second half of this year, but I really do believe that 2009 could be the year when all of this finally catches up with the technology sector.” At that time, and in line with some economic indicators, the analyst believes there will be a contraction in spending: for the IT industry he predicted a recession of between 1% and 2%. “Some areas will grow dramatically, some areas, unfortunately, will see some fairly major declines [in revenues] but the average is,” he said, “going to see a very minor but significant negative for 2009. “I think particularly, IT staffing companies, resources, people involved with IT contractors - I believe that they are already finding that people are laying off their contractors; even reducing the number of permanent staff they recruit, and that sector [staffing] is a very good barometer of what we might well see affecting the whole industry. ” Aug 14, 2008 Email this article Printer friendly page Previous Page
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