Study suggests France’s IT sector will shrink in 2013

Study suggests France’s IT sector will shrink in 2013
Finance

Although weathering the downturn better than other sectors, France’s IT sector hasn’t entirely escaped unscathed in 2013. Syntec Numérique, a leading association representing France’s tech sector, just released their annual report on the state of play in France, which projected that France’s tech sector will end the year down -0.3% from 2012.

Syntec-nov2013-1The hardest hit in the decline are projected to be technology consulting which is down -2% and SSII (IT services and consulting) which will end up the year off by -0.3%.  Software editors however seem to be in reasonable shape as they’re expected to end the year up 1.4%.  All three areas are expected to improve in 2014, although technology consulting will likely continue to struggle (i.e. continued decline of -1.4%). In their commentary on their analysis, Syntec stressed that while the overall numbers for 2013 were concerning, there was quite a bit of differentiation by industrial sector. So, for example, technology consulting to the energy sector actually performed quite strongly during 2013.

Still representing 61% of France’s IT sector revenues and the bulk of sector employment, SSII‘s (think IBM, Cap Gemini, Accenture and the like) performance continues to have a substantial impact on the sector overall. Even a slight uptick, which is projected for next year, will go a long way in helping to turn things around.  In addition, the rapidly increasing appetite for SaaS solutions has turned out to be a clear driver of growth for the sector, and a principal reason software editors are expected to finish the year on a high note. To underscore how strong this part of the sector is performing, IDC projects that total SaaS revenues will reach €1 billion in France by end 2013, which is a highly impressive 28% increase from 2012.

Meanwhile, according to Pole Emploi, France’s unemployment service, the unemployment rate of those with IT and telco backgrounds stands at 8,7% for those in the category A (unemployed without any PT work activity). While worryingly high by historical standards, this rate is in fact almost 2 percentage points lower than France’s overall rate. Although the employment situation has been less favorable as of late, the IT and digital sectors in France still continue to be a net creator of jobs, having created an avg of 10k jobs each year over the past 20 years.

 

Source, Syntec Numérique:

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