IT sector defies economic malaise

A gloomy outlook for the New Zealand manufacturing sector is unlikely to impact on IT spending.

A gloomy outlook for the New Zealand manufacturing sector is unlikely to impact on IT spending.

According to the Manufacturers' Federation, principal indicators for the sector over the next three months are negative with investment intentions down, along with employment prospects and, for the first time since December 1998, profit expectations.

However, David Moloney, president of the Manufacturers' Federation, says the manufacturing sector tends not to cut back on IT spending.

"It's important and they usually continue with it."

These sentiments were reflected by findings in the Institute of Economic Research (NZIER) quarterly survey of nearly 800 businesses for the three months to June, which showed that business confidence is now almost as low as during the Asian financial crisis.

A net figure of 13% of the businesses says they expect the amount of new investment on plant, equipment, fixtures and fittings to be less in the next 12 months than it has been in the past 12 months.

This contrasts with the previous quarter, when a net of 11% of businesses said they were going to increase investment in those areas.

However, the survey did not break out IT spending from overall investment in plant and equipment from that result.

But Moloney says any investment decrease for the manufacturing sector would be more likely to apply to industrial hardware than IT systems.

A spokesperson for a manufacturing firm, that did not want to be identified, says there will be no decrease in spending.

"We have requirements to be met and they will be met.".

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