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NZ ICT Sector Tops $11 Billion Value Mark

NEWS RELEASE 30 MARCH 2001

NZ ICT SECTOR TOPS $11 BILLION VALUE MARK

The information communications technology sector of New Zealand business has now topped the $11 billion value mark in total sales placing it in the forefront of the country¡¦s main economic drivers along with agriculture, tourism and general service industries.

The Executive Director of ITANZ, Mr Jim O¡¦Neill, said today the annual information technology survey for the year 2000 disclosed that the total value of New Zealand¡¦s information industry was $11 billion ¡V an increase of 6.9 percent on the 1999 financial year.

¡§This is great news for an industry that started off the year in a recession-like state with markets disrupted by the Y2K situation and business confidence at low levels. The figures demonstrate the ability of the ICT sector to bounce back into growth in the second half of the year, as well as ongoing demand at business and family levels for its products and services.

¡§Total sales of communication services were up five percent at $4.5 billion, a clear indication of the extent to which information technology is spreading through most sectors of the economy.

¡§These positive statistics should give a further impetus to the government¡¦s programme for developing e-government and e-commerce. They also emphasise the urgency with which we have to address the emerging digital divide between socio-economic groups within the country.

¡§The faster ICT spreads through business, government and family life the more urgent becomes the need for addressing digital divide issues. The speed at which New Zealanders are taking up ICT as indicated by these statistics emphasises there is no time to waste.¡¨

Mr O¡¦Neill said it was clear that an ongoing trend for businesses to outsource ICT services had stimulated industry growth while greater use of the internet and PCs were significant contributors to the sales increase.

Other key indicators in the survey included:

„h Export sales of IT were up 10.7 percent to $923 million
„h End user sales (excluding on-selling activities) increased 5.3 percent to $7.8 million.

The export figures show that communications hardware equipment and cables increased 26 percent from $245 million to $309 million while exports of communications services rose 4.6 percent, or approximately $10 million.

Exports of computer hardware, including peripheral computer equipment fell 37 percent to $18 million. Software sales abroad continued steady growth above the $100 million level.

¡§While New Zealand sales of single user systems fell 11.9 percent, sales of single user systems to other New Zealand users (which includes PC sales to other distributors) increased by 27.6 percent. The inconsistency is probably explained by the survey not covering PC retailers and department stores.

¡§It is significant that sales of communication services to New Zealand end users were up 5.3 percent, with sales of computer services rising 16.5 percent to a total of $1.8 billion. The growing use of outsourcing is probably the main reason for the computer services growth.

¡§Sales to end users of training and education in IT are estimated top be worth approximately $94 million. This is an increase of $30 million or 46.8 percent. However, most of the change is almost certainly due to an expansion of the breadth of the survey to take in more of New Zealand¡¦s tertiary education providers.¡¨

Mr O¡¦Neill said he had no doubt the industry would be heartened by the market resilience coming through after the difficult trading period in the first half of last year.

¡§These figures are a clear indication New Zealanders have embraced the new information age and our task now is to ensure that our communities are positioned to make the most of it,¡¨ he said.

For further information:
Jim O¡¦Neill
Executive Director, ITANZ
Tel: (04) 472-2731

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