In the fourth quarter of 2010, the sentiment in the economic sector of service providers of the information society continued to improve in comparison to the previous quarter. A reason for this is, in particular, the very positive development of the current business situation in the economic sector. Thus, the ZEW-IDI, the economic sentiment indicator for the whole economic sector of service providers of the information society, increased by 4.4 points in the fourth quarter of 2010 and now stands at a value of 66.8 points. A ZEW-IDI value above 50 points indicates a better economic sentiment in comparison to the previous quarter. These are the findings of a business survey conducted by the Centre for European Economic Research (ZEW) in cooperation with Creditreform, Neuss. The survey was conducted in December 2010 in the economic sector service providers of the information society (see details at end of press release).
"In the fourth quarter of 2010, the partial indicator reflecting the current business situation reached 71.9 points, its highest value ever", says Miruna Sarbu, ZEW researcher. The economic sector service providers of the information society consists of ICT service providers and knowledge intensive service providers. The sentiment indicator for the ICT service providers, i.e. software businesses, IT services, ICT specialised trade and telecommunication services, increased by 2.7 points in the fourth quarter of 2010, reaching a value of 65.6 points. This is without doubt due to the fact that ICT service providers assessed the current business situation considerably better. The partial indicator reflecting the current business situation increased by 11.7 points to a value of 74.2 points. In contrast, the ICT service providers’ business expectations for the first quarter of 2011 slightly worsened in comparison to the previous quarter. The partial indicator reflecting the business expectations decreased by 5.3 points to 58 points and now stands considerably below the value reflecting the current business situation. Apparently, the ICT service providers doubt that the positive development of the sector’s economic situation in 2010 will continue to the same extent in 2011. Nevertheless, the business expectations still are above the critical value of 50 points and, hence, indicate the ICT service providers’ optimism regarding the economic development in the first quarter of 2011.
Moreover, the economic sentiment for the knowledge intensive service providers increased in the forth quarter 2010, even though not as much as the sentiment for the ICT service providers. The sentiment indicator for tax consultants, accountants, management consultants, architects, technical consultants and planners, research and development as well as advertising companies increased by 6.2 points to a value of 68 points. The main reason for this development is the increased partial indicator reflecting the current business situation. In comparison to the previous quarter, the companies in this sub-sector also have slightly more optimistic business expectations regarding the first quarter of 2011.
The ZEW-IDI is composed of the four components turnover situation, demand situation, turnover expectations and demand expectations (each in comparison with the previous and following quarter, respectively). They are used for the calculations with equal importance. Turnover situation and demand situation form a partial indicator reflecting the business situation. The geometrical mean of the business situation and the business expectations amounts to the value of the ZEW indicator of the service providers of the information society. The sentiment indicator can adopt values between 0 and 100. Values greater than 50 indicate an improved economic sentiment compared to the previous quarter, values smaller than 50 indicate deterioration compared to the previous quarter. Detailed information about the development and calculation of the ZEW-IDI is provided in the ZEW documentation No. 03-09 (ftp://ftp://ftp.zew.de/pub/zew-docs/docus/dokumentation0309.pdf German only).
The economic survey conducted by the ZEW/Creditreform:
About 900 businesses participate in the quarterly survey. The economic sector service providers of the information society consists of information and communication technology (ICT) service providers (businesses of the sub-sectors software and IT-services, ICT specialized trade and telecommunication services) and knowledge intensive service providers (businesses of the sub-sectors tax consultancy and accounting, business consultancy, architectural offices, technical consultancy and planning, research and development and advertising). An overview of the ZEW/Creditreform economy survey is available online at www.zew.de/dienstleister (German only).
Comment on the projection:
To ensure the analyses’ representativity, the ZEW projects the answers of the survey participants with the turnover value of the businesses with regard to the entire economic sector service providers of the information society. The phrasing "share of the businesses" therewith reflects the share of turnovers of the businesses.
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