Tech firms reveal gloomy economic outlook

Technology firms expect economic conditions in the sector to worsen before they improve, according a new survey by the Economist Intelligence Unit (EIU).

The Tech Sector Barometer survey found that two thirds of tech companies expect the financial health of the sector to worsen, whilst nearly half (46%) expect demand to deteriorate further.

Almost four in five of those polled said research and development activity will slacken or stay the same.

“The green shoots of economic recovery are virtually nowhere to be seen,” the survey concluded.

Just one in five companies expect demand to increase in the next six months, and only 10% expect the financial health of tech companies to improve.

Computer firms are more pessimistic than those in the telecoms sector, with 56% expecting conditions to deteriorate further, compared to 40% in telecoms.

Carla Rapoport, senior analyst at the EIU, attempted to look for the positive despite the industry’s gloom.

“Debt among the big players is relatively low, many emerging markets are still growing and there are few of the overcapacity problems we saw following the dotcom crash,” Rapoport said.

However, she added that “the industry clearly sees little chance of an early recovery.”