Spending on electronic devices like laptops and office consumables fell in the second quarter of 2010 thanks to lower consumer confidence and the lack of Government stimuli, according a new report.
The GfK TEMAX report indicated IT was especially hard hit and experienced its first fall in value growth for over five years.
Large flat panel TV market performed relatively strongly thanks to the World Cup, but the category still fell overall. Spending dropped 5.2 per cent on average. Consumer electronics fell 8.3 per cent, office equipment and consumables by 6.6 per cent and IT by 1.5 per cent.
The negative move came despite interest rates staying flat for the duration of the period.
“[IT experienced] a decline of 1 per cent in quarter 2, 2010, compared to the same period last year,” the report said. “This year’s decline in value has been exacerbated by strong price erosion in the dominant notebook PC market [down 3 per cent].”
The report went on to claim there had been an average price decline of 25 per cent in the IT sector.
But not all electronic categories fell, according to the report’s authors. Storage devices had rose in value by 23 per cent and unit sales by 62 per cent.
“Thanks to the buoyant smartphones category, the telecommunications sector was the only area to show growth compared to the same quarter last year,” the report said. “While the value of traditional mobile phones fell 52 per cent from Q2 2009, sales of smartphones more than compensated…with an increase of 92 per cent.”
Unfortunately for the market, GfK predicted Q3 was looking bad with the Federal Election set to dominate the period.
“The negative sales trends of quarters 1 and 2 of 2010 are likely to continue into quarter 3,” it said. “The continued introduction of new technologies, however, may help keep the decline to a minimum.”