The EU suffers post-Brexit blues

I expect ITC spending to decline by 0.3% in EMEA in 2019, but EMEA itself is divided into a number of sub-regions (see my Figure). I expect both Western (-0.5%) and Eastern (-0.2%) Europe to fare worse than Africa (+0.9%) and the Middle East (+1.0%) in the year.

The major issue affecting ITC spending in the whole region will be how the EU manages to resolve growing trade challenges. It has failed to create regional champions in our industry, so almost all hardware and software used by its citizens and companies are now sourced from suppliers based in the Americas or Asia Pacific. ITC products are likely to become more expensive in the EU as the result of trade wars between the US and China; in the absence of its own regional suppliers it makes no sense to engage in its own trade wars.

The UK has been a strong asset to the EU as it has been the traditional first staging post for ITC suppliers seeking to expand across the region. As the UK leaves the EU is left with only one country (Ireland) that speaks English as its national language. While the UK market will decline most of all countries in EMEA in 2019, the ITC market in remaining EU states also face a less certain future as a result.

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