Pixelated near-term outlook for tech firms as economic landscape glitches

Will tech spending be able to recover?

As with all tech sectors, Singapore’s banks on the condition of the economic outlook. With the world economic growth not exactly looking inspiring, analysts are pessimistic about both business and consumer sentiment.

According to analysts from OCBC, while near-term outlook remains muted, tech spending is expected to rebound once the global economy regains its footing.

“As the world continues to digitalized and be connected via network (“internet of things), and with the increasing adoption rate of smart devices, we are still positive on the sector over the longer-term,” OCBC said

Meanwhile, the tech sector has more things to be optimistic about as consumers in mature markets will use and own three to four devices by CY18, forecasting that the installed base of devices will total 7.8b units in CY16.

However, despite a bright long-term outlook for tech firms, headwinds remain on the horizon.

“Downside risks remain as a result of declining commodity prices, which leads to reduced capital flows to emerging markets and put pressures on their currencies,” OCBC says.