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Longhaus Australian Tech Index Q2 2011 Outlook
Longhaus, Oct 2011
The Longhaus Australian Tech Index improved by 3.1% (or 4.8 points) to finish at 158.7 by the end of Q1 2011. Increasing ICT goods and services trading activities backs this continuous momentum. The latest CIO Confidence Poll revealed that in Q2 2011, Australia’s ICT decision makers are holding a positive outlook over the coming quarter, however the confidence shrank noticeably as compared to the previous poll.Over the previous quarter, Australia’s ICT trading activities have been improving.
The trading performance saw ICT exports increase by 12% and imports increase by 9% quarter-on-quarter. The index is slightly offset by weakening vendor performance. ICT recruitment capacity dropped slightly by 1% in job vacancies quarter-on-quarter. This slight fall in labour demand partially reflected CIO forecasts from the fourth quarter confidence poll.Looking ahead, Australian CIOs have again forecasted positive growth in Q2 2011 with the 50 respondents anticipating significant index gains of between 3.6% and 6.6%. Although a positive outlook, it signals a cautious message since the forecast has dropped compared to previous quarter. This is the first quarter-on-quarter confidence rating decline since Q2 2010. Longhaus maintains a cautious optimism for Q2 2011 given a weakening vendor performance and shrinking of CIO confidence. Longhaus believe the Tech Index will land between 157-159 range at the end of Q2.
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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