APEJ manufacturing IT spend to hit $33bn by 2012

SINGAPORE & HONG KONG: Leading independent research and advisory firm, Manufacturing Insights Asia/Pacific, an IDC company, announced that the Manufacturing IT spending in the Asia/Pacific excluding Japan region (APEJ), is likely to reach US$33 billion by 2012 at a CAGR of 9.5 percent.

The report, “Asia/Pacific (Excluding Japan) Manufacturing IT Spending 2008-2012 Forecast” provides a discussion of the IT spending among the region’s manufacturers by segment and looks at the drivers and key trends spurring activities in the region. It also includes a forecast outlook for the 2008-2012 period, and highlights the markets with strong manufacturing IT spending as well as the emerging ones.

Debashis Tarafdar, senior research manager of Asia/Pacific Manufacturing Insights, said: "The year 2007 ended with a number of destabilizing factors that continue to plague business sentiments across the globe, including the APEJ region. These include the financial market crisis, weak US dollar, rising cost of oil, concerns over a global economic slowdown, inflationary pressures from food and commodity prices, as well as increases in labor costs in key APEJ economies.

However, increased globalization and competitive market pressures will push APEJ manufacturers to become more agile and resilient to market changes, and invest in IT to foster innovation, collaboration, and sustainability."

Key findings of the report include:

* APEJ manufacturing IT spending will maintain a steady growth through 2012, with high-tech, automotive, and consumer packaged goods (CPG) manufacturers continuing to lead the pack.

* Peoples' Republic of China will account for the largest share of APEJ manufacturing IT spending, while for the first time in 2008, India is expected to move into second place, overtaking Korea in terms of total IT spending in the manufacturing sector.

* Similar to 2007, hardware spending will continue to take up the lion's share of the overall APEJ manufacturing IT budget, though IT services is expected to register the strongest growth over the next five years, indicating the increasing maturity of the APEJ manufacturing IT landscape.

"The market forecast and analysis presented in this report reflect the gradual maturity of APEJ manufacturing IT landscape. As manufacturers face increasing competition, uncertain business climate, and various inflationary pressures, the focus will shift from mere automation to innovation and customer-centricity. IT investments emerge to add more value to businesses to support sustainable growth, rather than being just a cost center," concludes Tarafdar.