Improving macroeconomy should impact it service

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Unformatted text preview: that tracks the health of the tech sector. Figure 9 demonstrates that tech spending in the US had started to rise at least two quarters before the upgrade cycle in 2009 US GDP forecasts. With tech spending picking up in the Dec-Q, and US GDP growth rates also getting revised upwards, we believe tech spending is likely to improve in the coming quarters. Page 8 Deutsche Bank AG/Hong Kong 7 January 2014 Software & Services Indian IT Services Figure 9: Trend in Deutsche Bank estimates of US GDP growth forecast and Tech Pulse Index 2007 2008 (LHS) 2009 (LHS) 2010 (LHS) 2011F (LHS) 2012F (LHS) 2013F (LHS) 2014 (LHS) 2015 (LHS) Tech Pulse Index (RHS) (DB US GDP forecast- %) (Tech Pulse Index) Tech Pulse Index had strated to improve since Jun 09, coinciding with the upward revision to US economic growth forecasts 5.0 95 4.0 90 3.0 85 2.0 80 1.0 75 0.0 70 With upward revisions to US' economic growth outlook, Tech Pulse Index suggests that overall tech spedning in the US is likely to improve -1.0 65 60 -3.0 55 -4.0 50 29th Jan 2007 26th Feb 2007 2nd April 2007 7th May 2007 11th June 2007 16th July 2007 24th Sep 2007 29th Oct 2007 3rd Dec 2007 14th Jan 208 12th Feb 2008 10th Mar 2008 14th April 2008 12th May 2008 9th Jun 2008 7th July 2008 4th Aug 2008 30th Sep 2008 6th Nov 2008 10th Dec 2008 21st Jan 2009 18th Feb 2009 18th Mar 2009 15th Apr 2009 13th May 2009 10th Jun 2009 15th Jul 2009 9th Sep 2009 7th Oct 2009 4th Nov 2009 9th Dec 2009 20th Jan 2010 17th Feb 2010 17th Mar 2010 21st April 2010 19th May 2010 16th June 2010 14th July 2010 8th Sept 2010 6th Oct 2010 4th Nov 2010 1st Dec 2010 13th Jan 2011 11th Feb 2011 9th Mar 2011 18th Apr 2011 11th May 2011 8th June 2011 6th July 2011 2nd Sept 2011 5th Oct 2011 3rd Nov 2011 2nd Dec 2011 27th Jan 2012 2nd Mar 2012 4th Apr 2012 9th May 2012 6th Jun 2012 13th Jul 2012 6th Sept 2012 12th Oct 2012 8th Nov 2012 8th Dec 2012 23rd Jan 2013 22nd Feb 2013 28th March 2013 15th April 2013 10th May 2013 5th June 2013 11th July 2013 6th Sept 2013 9th Oct 2013 8th Nov 2013 6th Dec 2013 -2.0 Source: Deutsche Bank, Global Economic Perspectives, Federal Reserve Bank of San Francisco CY14 IT spending is likely to be higher Technology research and advisory firms have also indicated a positive outlook for CY14 IT spending by customers. While both the size and nature of these budgets will be clear only in mid-February of CY14, directionally, it is indicative of a positive IT spending environment. Figure 10:...
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