Growth of ICT Sector Slows Down

Mexico’s economic recovery is slowing down, delaying the growth of the information and communication technology (ICT) sector, reports business and technology consulting firm Select on its quarterly Technology and Business Report. The sector grew 6 percent in the second quarter of the year and several of its segments are still highly dynamic, such as investments in connectivity, migration to the cloud and cybersecurity services.

According to Select, the Mexican economic recovery seen during the first half of 2022 will likely slow down, affecting the growth of ICT services. However, some services are still in high demand, such as microservices architecture, cloud migration and cybersecurity. The growth of the sector is further delayed by the lack of talent.

Growth slowed down due to the contraction in demand for PCs and devices, explained Alejandro Vargas González, Analysis Manager, Select. Under these circumstances, wholesalers face a challenge in moving inventories. Moreover, the increase in interest rates makes project financing more expensive. "If the current trend continues, the ICT industry will grow 8 percent in 2022 in current pesos. That is to say that it will have lower growth than in 2021,” said Vargas. During the second quarter of the year, the federal government's ICT spending also shrank, said Arely Reyes Gaspar, Analyst, Select.

The telecommunications segment grew 6.2 percent in the first half of the year, said Erick de la Cruz Rojas, Analysis Manager, Select. While other sectors have slowed down, cloud adoption continues to accelerate and propel ICT services, growing at a 30 percent rate per year, said Ricardo Zermeño González. The Select Opportunities Radar in ICT Services highlights the growing popularity of Infrastructure as a service (IaaS), platform as a service (PaaS) and software as a service (SaaS). The main challenges for the sector continue to be recruitment and retention of specialized talent, said Zermeño: "42 percent of companies report that, on many occasions, they are facing competition for talent from companies in other countries."