Canadian computer and electronic product manufacturers in 2011 can expect a strong rebound from the recession, but the next six months are a critical period for the IT industry, according to The Conference Board of Canada.
Corporate profitability plunged about 40 per cent in late 2008/early 2009 as customers put a break on investing in technology, followed by a significant increase in the latter half of 2009, said Maxim Armstrong, economist with The Conference Board of Canada. “We had this super big wave that came after the big drop,” said Armstrong. “Now it’s flat.”
Armstrong expects the next six months will witness a moderate rise in corporate profitability. During this time, some but not all jobs will get re-created but companies will remain unsure, he said. Things will be “okay, but not bad, and not super good,” said Armstrong.
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Despite this precarious next six months, Armstrong said 2011 will start with a recovery phase that is more sustained, and finally a strong rebound.
The prediction for the IT sector is part of The Conference Board of Canada’s Canadian Industrial Outlook Spring 2010.
IT managers responsible for IT software and hardware procurement should consider what this report means for their IT budgets that have likely got slashed in the past couple of years, said Armstrong.
He thinks the rebound, albeit slow, is a signal to IT departments to resume investing in the IT infrastructure again unless they want to get left behind. “That means that their competitors are going to invest so they should think about it too,” said Armstrong.