Service Providers of the Information Society - Deterioration of the Business Situation Discourages Economic Sentiment
Information EconomyThe overall sentiment in the sector of service providers of the information society has tarnished in the first quarter of the year 2011 in comparison to the quarter immediately prior to it. To a significant extent, this is due to the deterioration of the business situation. Accordingly, the ZEW-IDI drops by 4.4 points in the first quarter of 2011 to a level of 62.4 points. Even though the direct contrast with the previous quarter suggests a lower value, a ZEW-IDI above 50 points indicates an arguably improved economic sentiment with respect to the previous quarter. This is the result of the business survey conducted by the Centre for European Economic Research (ZEW) in Mannheim in a collaborative effort with Creditreform, Neuss, in March 2011 in the sector of service providers of the information society. (Details shall be provided at the end of press release)
"The partial indicator of the ZEW-IDI which reflects the evaluation of the current business situation decreased by 13.2 points since the previous quarter and now stands at a value of 58.7" says Miruna Sarbu, researcher at the Centre for European Economic Research. However, the partial indicator which reflects the economic sentiment for the second quarter of 2011 increased by 4.2 to 66.3 points.
The economic sector of service providers of the information society embraces both the information and communication technology service providers and the knowledge intensive service providers. The sentiment-indicator for the information and communication technology sub-sector (software companies, IT-Services, ICT-specialized trade and telecommunications service providers) has increased by 0.6 points in the first quarter. This step-up raises the indicator to 66.2 points. Two directly opposed developments underlie this arguably low increase. The partial indicator reflecting the current business situation drops by 10.3 to 63.9 points. Nevertheless, the ICT service provider’s expectations for the following quarter improved. The partial indicator mirroring the expectations for the second quarter rose by 10.7 points and now stands at 68.7.
Regarding the knowledge-intensive service providers, the business sentiment has substantially deteriorated in the first quarter of 2011. The respective indicator for tax consultants, accountants, management consultants, architects, technical consultancy and planning, research and development as well as advertising companiesdecreases by 11.7 to 56.3 points. This development stems primarily from a deterioration of the business situation partial indicator, which fell by 18.2 points. It now stands at 50.7 points and henceforth barely lies above the crucial 50 point mark. With regard to the upcoming quarter, the companies’ expectations have also changed for the worse in comparison to the previous quarter.
For further information please contact
Miruna Sarbu, Phone +49 (0)621/1235-334, E-mail sarbu@zew.de
The ZEW-IDI
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.
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).
Overview of the ZEW/Creditreform economy survey (in Germanm 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.