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SCMP Reporter

Updated at 5.33pm:
Hong Kong?s information technology services market is expected to grow at around 3.8 per cent over the next four years, a new report released this week predicts.

The report by Gartner, a company specialising in researching the global IT industry, noted that Hong Kong?s IT services market would not experience the high growth rate it had enjoyed last year.

?Overall, Hong Kong is a mature IT services market and we?re expecting to see a compound annual growth rate of 3.8 per cent through to 2009 ? certainly nothing close to the nine per cent rebound experienced in 2004,?? said Twiggy Lo, an analyst with the company.

Hong Kong?s market would continue to benefit from its close proximity to China.

?The indirect influence of China on Hong Kong?s market is of course significant, with the Closer Economic Partnership Arrangement and tourism both having a positive impact on investment in Hong Kong,? added Ms Lo.

The report said emerging markets ? particularly China and India ? would be the ?main engines? for IT growth in the Asia-Pacific region in the next few years.

And it predicted Asia?s strongest performing area of IT would be professional services ? led by development and integration, IT management and consulting.
 
India and China were likely to experience ?robust? IT service market growth in 2005. India?s market was expected to grow at 22.7 per cent and China?s at 11.8 per cent this year, the report said.

?Despite overall economic recovery and improved business confidence in 2005, growth in mature markets such as Australia, Hong Kong and Singapore, will be mild at four per cent, 3.8 per cent and three per cent respectively, in local currency terms,?? Gartner said in a statement late on Monday.
 
 Dramatic changes affecting China were boosting its IT services market.
 
?China itself is a different story with 14.1 per cent compound annual growth rate for IT services projected through 2009,? explained IT Services Asia Pacific analyst Tina Tang.

This was being driven by market reforms, with the World Trade Organisation stimulating heavy investment in IT. Other factors included mainland companies striving to become more competitive internationally and a high level of foreign investment.

?The financial and telecommunications sectors lead IT services spending followed by the manufacturing industry with the strongest demand for professional services,? Ms Tang said.

The report is available on Gartner?s website at: http://www4.gartner.com/DisplayDocument?ref=g_search&id=472821



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HK?s IT services market will grow at around 3.8pc in 2005