Brazil’s IT Services Sector Records Surprisingly Strong Growth

The information technology services industry in Brazil grew by 8.7% in the 12-month period between July 2013 and June 2014, according to a study by IDC. A growing corporate interest in atomization and the expanding number of R&D centers to support offshore oil exploration projects were the chief drivers of growth.

“Considering inflation and the current economic instability in the country, this is a phenomenal performance,” said the research firm’s senior analyst Renato Rosa.

The report confirms that there is a growing awareness in the Brazilian corporate world about staying agile. Many corporate firms anticipating a lengthy winter holiday season invested heavily in information technology to automate their business operations.

The demand for technology service is not pushing up the prices of hardware or IT services; instead suppliers are under tremendous pressure to reduce prices. The rising value of the U.S. dollar, analysts say, could be hurting the profitability of some tech dealers who import most of their products from North America.

The latest trend, according to IDC, is that businesses in health care and agriculture are showing a renewed interest in investing in IT services.

The analysts firm says the market could grow at a faster pace still in the months ahead now that the presidential election is over.  “After a period of political uncertainty, we believe that [Brazil] will have a very promising period ahead,” Rosa said.

Thanks to the discovery of offshore oil deposits, several top technology service providers aligned with petroleum firms –– such as Schlumberger, Baker Hughes, Halliburton, Siemens and EMC –– are planning to setting up R&D centers in Brazil.

As recently as two weeks ago, General Electric launched an oil & gas research center on the Ilha do Bom Jesus peninsula near the city of Rio de Janeiro. BG Group is also planning to open a global technology center to reinforce its research base in Brazil.

Analysts say the sudden surge in the number of R&D service centers could also be contributing to the demand for IT services.