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Q1 2011 Outlook - Australian Tech Index
Longhaus, March 2011, Pages: 10
The Longhaus Australian Tech Index improved by 3.5 % (or 5.4 points) to finish at 154.6 by the end of Q4 2010. This movement corresponded to Longhaus’ previous assertion that the 2010 end-point for the index would signify a new historical peak. With this increase the Tech Index has set a new benchmark with Q4 2010 being the best performing single quarter surpassing the 2007 peak at 154.5. The latest CIO Confidence Poll revealed that in Q1 2011, Australia’s IT decision makers are expecting the Australian ICT economy to gain firmly. Although posting an increasing performance score overall, the ICT labour market has recorded a decline with an 8% ICT job vacancy rate decreasing quarter-on-quarter and representing a dramatic turning point in labour market.
The 8% decrease may provide an early indication of ICT labour supply overtaking demand which matches CIO forecasts from the previous quarterly confidence poll. Offsetting any negative impact from labour market, Australia’s ICT trading activities have been very active over the last quarter. The index has been driven up by a significant trading performance that saw ICT exports increase by 15% and imports increase by 11% quarter-on-quarter. Looking ahead Australian CIOs have again forecasted high positive growth in Q1 2010 with the 50 respondents anticipating significant index gains of between 8% and 15%. Despite this optimism that forecasts a 168-179 range for the index, Longhaus believe that 2011 will start by levelling out the Q4 2010 peak.
The Longhaus Australian Tech Index is a quarterly index based on a propriety model developed to measure the health of the Australian ICT industry. The model measures the Australian ICT industry from the following four (4) dimensions: a) demand forces including ICT spending and ICT importing, b) supply factors including influx volume of venture capital (VC) funding, c) strength of vendors indicated by market value, and employment capacity, and d) consumer factors including internet subscription rates. Collectively, these four (4) dimensions and their accompanying factors indicate the health of the Australian ICT industry. Finally by providing calculated weightings to these indicators and including heuristic views from Australian CIOs, the index provides important insights into lag, lead and predictive indicators of the Australian technology economy.
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