According to The Conference Board of Canada latest report highest profits will be witnessed by Canada ITC industry in nine years with an unimpressive outlook for the industry.
Highest profits will be witnessed by Canada ITC industry in nine years, as per The Conference Board of Canada latest report. However, the report suggests an unimpressive outlook for the industry.
The report reveals that despite a weak production output in 2006 (so far), ITC industry profits are attributed to strong growth in 2005, which are being carried over to 2006. Report says the growth of ITC industry is declining in 2006. Only 2% of average real output growth will be there in 2006, down from average 5.6% in last two years.
Despite slow production growth in 2006, industry will make solid profits till 2010, as per Michael Burt, senior economist for Conference Board. There is a strong demand for ITC services & products by both consumers & businesses. Convergence of traditional & cable telecom services is continually attracting investments in product & equipment innovation.
Industry is likely to witness a fair growth during the period. In telecom sector, market share will continue to move towards wireless services from wired ones. Prices are declining but at a lower rate than they did in the past.
There is acceleration in labor cost growth as firms are facing problems in recruiting qualified staff. However, increasing output will result in higher revenue growth than the cost of production, resulting annual profits of US$ 7.1 Billion by 2010 for the industry.
"ITC industry is working at near capacity, Major Canadian firms are increasing their production through outsourcing in developing nations with cheap labor & raw material. This will act as a key hindrance in overall growth of Canada's ITC industry", said an analyst at RNCOS.
As per analysts, profits for ITC will account to US$ 5.4 Billion this year, with recovery in output growth projected in 2007. Reasonable improvements in costs & pricing power, which increase at a lower rate, compared to revenues, will likely be the basis for steady profits till 2010.
Related Market Research Reports:
Global IT Security Market Forecast to 2012
3G Market Forecast to 2010
Indian Telecom Analysis (2008-2012)
