Service Providers of the Information Society - ICT Service Providers Boost Sentiment
Information EconomyIn the third quarter 2010, the sentiment in the economic sector of service providers of the information society consisting of ICT service providers and knowledge intensive service providers is optimistic. "The reason for this development is that the situation for ICT service providers has considerably improved. This, in turn, is due to the firms’ optimistic assessment of the business situation in this sub-sector," says Jenny Meyer, researcher at the Centre for European Economic Research (ZEW) in Mannheim. Among the ICT service providers, i.e. software businesses, IT services, ICT specialised trade and telecommunication services, particularly firms in the software and IT services sector are the driving force behind this development. More than 50 percent of these firms report an increase in sales and a majority reports increasing demand in the third quarter 2010. 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 September 2010 in the economic sector service providers of the information society.
The survey results of ZEW and Creditreform contribute to a sentiment indicator for the ICT service providers. In the third quarter 2010, the indicator increases by four points and reaches a value of 62.9. The partial indicator reflecting the current business situation increases by eight points to a value of 62.5. The partial indicator reflecting the business expectations now stands at a value of 63.3 points.
The economic sector service providers of the information society also includes tax consultants, accountants, management consultants, architects, technical consultancy and planning, research and development as well as advertising companies. The sentiment indicator for these knowledge intensive service providers slightly decreased by 1.5 points and now stands at a value of 61.8. This is the result of a small decrease in the partial indicators reflecting both the business situation and the business expectations in these economic sectors. Despite this slight decrease, the value above 50 points indicates a better economic sentiment in comparison to the second quarter 2010.
Compared to the previous quarter, the development in the third quarter 2010 indicates a slight improvement in the business situation for the whole sector service providers of the information society. The ZEW indicator for service providers of the information society (ZEW-IDI) is a sentiment indicator for the business situation in this economic sector. In comparison to the second quarter 2010, the ZEW-IDI increased slightly by 1.6 points and now stands at 62.4 points. The partial indicator reflecting the business situation in the third quarter 2010 increased by 3.5 points to a value of 60.5 points. The partial indicator reflecting the business expectations decreased by 0.5 points in the third quarter 2010 and now reaches a value of 64.5 points.
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 German language)
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.
For further information please contact
Dr. Jenny Meyer, E-mail: meyer@zew.de