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May 2008
Downturn hits UK IT companies - could it spill over to SA? Predictions that the economic slowdown will force the scaling back, delay or complete stoppage of software projects in Britain's corporate sector seem to be coming true. There is also a good chance that this might start happening in SA as it faces an increasing economic downturn, said Karen Geldenhuys, MD of IT recruitment company, Abacus Recruitment. In fact, in the UK - which is also feeling the fall-out from the sub-prime mortgage crisis - profit warnings from FTSE-listed firms in computer services and software hit a new nadir in the first quarter this year, according to a new report by Ernst & Young. Thirteen profit warnings were issued by 13 IT and software companies in the first few months of 2008, up 44% from the 9 warnings in the last quarter of 2007, said a recent UK report. "I don't think it is as bad here. There is still some buoyancy in the SA IT market. In fact, we are battling to fill posts - but that is mainly due to the skills crisis. But I do believe the current economic environment - with business confidence being so low - is going to make IT companies cautious. Where we will continue to see growth is in the construction sector due to the need to get ready for the 2010 world soccer cup." |