UK IT skills market down 13% in 2003

IT Skills Research, the UK IT skills market think tank, has made a preliminary estimate from 2003 market and results data collected thus far, which shows that the size of the UK IT skills market in 2003 was reduced to £365 million; a dip of 13% over 2002.

So How Bad Was 2003?

The IT training industry is now well into a third year of recession, the longest and deepest recession the industry has experienced. Just when we thought recovery was beginning, we got another dip instead. Forecasting has been difficult as the market has fluctuated on almost a weekly basis. Many companies have been forced to cut their costs and reduce their headcounts. Pricing, particularly in some of the commodity areas, has been cut-throat. A few companies, thankfully only a few, have gone to the wall or been sold at a knock-down price. So, is it possible to put a figure on what has been happening?

From an all-time high in 2000, the UK IT training market fell by about 5% in 2001 and then by a further 16% in 2002. We would normally make our estimate for 2003 next Spring, once everyone's financial reports are in. But this year we've actually made a preliminary estimate based on our quarterly surveys during 2003 and the financial results already reported by companies in the first three quarters of the year, and on anecdotal evidence. And the figure we've come up with for the UK market in 2003 is £365million. As we said, this is just a preliminary estimate. But if it's accurate it means the market is down another 13% in 2003, and down 30% from its peak in 2000. The last time the market was this small was 1996. Or if you adjust the figure to allow for inflation, the market this year was almost exactly the same size as in 1995. No wonder it's been difficult!

Now What About 2004?

In view of the distinctly unfestive tone of the paragraph above, it seems only fair to point out some of the rather more positive indicators for the weeks and months ahead. So here goes:

• IT Training industry recovery has already begun in the US.
• IT recruitment is on a rising trend.
• UK service sector growth in November was at its strongest for 6 years.
• The financial performance of key technology companies (IBM, Intel etc) has shown a significant upturn.
• Share prices of technology companies have increased strongly in 2003, with the Nasdaq index up 50%.
• The IT Skills Research index of UK training company share prices (ITTSI£) is up 58% in 2003. ITTSI$ is up 50%.
• Share prices of e-learning companies on Nasdaq are up 200% in 2003.
• Training providers throughout Europe believe the market will expand in 2004, yet most training company business plans and budgets for 2004 assume little or no growth, thus leaving scope for significant over-achievement.

So in fact, the prospects for 2004 are quite exciting. For more details on these points, see Research Digest, Company Results and Sharewatch on the IT Skills Research website.

IT Skills Research is the leading source of information on the UK IT training industry. It offers pooled research to subscribing members and publishes industry news on its public Web pages. IT Skills Research's market reports and surveys are also available for open purchase. Its Research members include: Azlan, British Computer Society, Citrix, HP Education, IBM, Interquad, Knowledgepool, Learning Tree, Microsoft, NETg, OCR, Oracle University, Parity Training, Pearson VUE, QA, SAP, Spring IT and Sun.