The next 12 months are set to be brighter for the UK economy, with a retail recovery likely and higher consumer spending, market watcher BDO Stoy Hayward has predicted.
According to the latest Business Trends Report from BDO, cooling oil prices and stabilising house prices will ease inflationary pressures in 2006, which will in turn improve consumer optimism and therefore spending.
Chris Grove, partner at BDO, told CRN: “We don’t expect the Bank of England’s Monetary Policy Comm-ittee to cut interest rates this month, but it is likely that we will see a cut
to 4.25 per cent by the end of the year which will put more money into people’s pockets.”
Asked whether resellers would benefit from businesses investing in IT this year, he said: “Over the last year, businesses tended to only spend on essentials. Growth will come through in the second and third quarters of 2006 so businesses that may have held back on non-essential IT spending in 2005, because of low confidence, should be looking to spend more this year as confidence rises. For resellers it will probably be a slow start to 2006.”
Distributor Computer 2000 (C2000) welcomed BDO’s prediction. “Our resellers are requesting more consumer-related products. With the World Cup set to be broadcast in high-definition (HD); HD-ready LCDs and plasmas will be big news for the first half of this year,” said Tracy Barrow, business development manager of audiovisual at C2000.
Paul Graham, managing director of online reseller Excite IT, said: “We’ve forecasted year-on-year growth for Excite this year. Our own research indicates that there should be a good recovery in consumer spending during 2006. It’s predominantly notebooks that consumers are buying.”
Bob Armao, chief executive of Ebuyer, said: “We grew by about 15 per cent year-on-year over the Christmas period and had sales of £220m for 2005. We are predicting to hit between £275m and £300m for 2006.”
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