Optimism Increases Among the Companies of the Information Economy

The economic sentiment within the economic sector of the information economy has improved further during the first quarter of 2013. Compared to the fourth quarter of 2012, the ZEW Sentiment Indicator Information Economy increases by 2.8 points and now reaches a level of 61.3 points. It has been crucial for this increase that the companies assess the future business development clearly more optimistically than during the final quarter of 2012. The sub-indicator of business expectations increases by 13.5 points to 69.1 points, which more than outweighs the decrease in the previous quarter. This is the result of a survey conducted by the Centre for European Economic Research (ZEW) in March 2013 within the information economy (further information regarding the survey at the bottom of the press release).

It is the first time since the fourth quarter of 2011 that the ZEW Sentiment Indicator Information Economy reaches a value of more than 60 points, thereby moving further away from the critical 50-points mark; undercutting this mark is a sign of impending economic deterioration. The current improvement shows that uncertainty regarding the further economic development within the information economy decreases. The good economic sentiment within the economic sector is in line with the positive overall economic trend, which has already been indicated by the results of the ZEW Indicator of Economic Sentiment and other indicators since the beginning of 2013.

The sector of the information economy consists of the sub-sectors information and communication technologies (ICT), media service providers, and knowledge-intensive service providers. The level of the sentiment indicator for the ICT sub-sector points to a stable economic development. Although the indicator drops by 1.4 points within the current survey, its level of 65.6 points is still giving reason to expect a positive economic development.

In the media sector a clear improvement of the economic sentiment can be observed within the first quarter of 2013. The Sentiment Indicator of this sub-sector gains 7.3 points compared to the previous quarter and reaches a value of 46.8 points, the highest level in more than one year. The indicator thus just barely undercuts the critical 50-points mark within the current quarter. This positive development can be traced back to business expectations alone, which rose from 28.1 to 65.1 points in the first quarter of 2013 after the drop in the final quarter of 2012.

Regarding the providers of knowledge-intensive services, the Sentiment Indicator also points towards a positive economic development. It increases by 5.6 points and reaches a level of 60.7 points. While the sub-indicator for the business situation decreases slightly, business expectations increase significantly. The respective sub-indicator reaches 69 points, which equals an increase of 16.2 points compared to the final quarter of 2012. PR companies and business consultancies are particularly optimistic. Some three quarters of them expect sales increases in the next quarter, whereas only 1.8 per cent are worried that sales volumes might decrease.

For further information please contact

Daniel Erdsiek, Phone +49 621/1235-356, E-mail erdsiek@zew.de

The ZEW Economic Sentiment Indicator for the Information Economy

The ZEW Economic Sentiment Indicator for the Information Economy is composed of the four components turnover situation, demand situation, turnover expectations and demand expectations (each in comparison with the previous and following quarter). They are used for the calculations with equal importance. Turnover situation and demand situation form a partial indicator reflecting the business situation. Turnover expectations and demand expectations form a partial indicator reflecting the business expectations. The geometrical mean of the business situation and the business expectations amounts to the value of the Economic Sentiment Indicator of the Information economy. The sentiment indicator can adopt values between 0 and 100. Values above 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 ZEW

About 5,000 businesses with a minimum of five employees participate in the quarterly survey conducted by ZEW. The companies surveyed belong to the following business sectors: (1) ICT hardware, (2) ICT service providers, (3) media, (4) law and tax consultancy, accounting (5) public relations and business consultancy, (6) architectural and engineering offices, technical, physical and chemical analysis, (7) research and development, (8) advertising industry and market research, (9) other freelance, academic and technical activities. All nine sectors combined make up the economic sector of the information industry. The ICT sector consists of ICT hardware and ICT service providers. The last six sectors make up the knowledge-intensive service providers.

Comment on the projection

To ensure the analyses' representativeness, ZEW projects the answers of the survey participants with the turnover value of the businesses with regard to the entire economic sector information industry. The phrasing "share of the businesses" thus reflects the share of turnover of the businesses.