German Information Economy - Positive Expectations in the Information Economy

The economic sentiment among businesses in the information economy currently remains favourable. The ZEW Sentiment Indicator, which considers the current business situation as well as the companies' business expectations, has reached 63.4 points. Compared to the first quarter of 2015, expectations regarding economic development have shown improvement in the second quarter of 2015. This is the result of a survey conducted by the Centre for European Economic Research (ZEW) in March 2015 in the information economy (further information regarding the survey is available at the bottom of this press release).

Compared to the previous quarter, economic expectations have deteriorated slightly. This is reflected by the corresponding sub-indicator for the business situation, which has declined by 8.9 points to 60.4. The fall in sentiment, however, is almost compensated for by increasingly optimistic expectations with regard to economic development in the second quarter of 2015. The corresponding sub-indicator for business expectations has climbed to 66.4 points. Both sub-indicators are thus well above the critical 50-points mark, signalling a predominantly positive economic situation as well as generally favourable expectations.

The information economy sector consists of the sub-sectors, information, and communication technologies (ICT), media service providers and knowledge-intensive service providers. The sentiment indicator of businesses in the ICT sector currently stands at 67.5 points, indicating a largely positive economic climate in the sector. The indicator maintained its high level and continued its growth, climbing an extra 1.1 points compared to the previous quarter. This increase is the result of the more positive expectations of companies regarding the future development of revenues and demand. As a result, the sub-indicator for business expectations records an increase of 10.2 points compared to the previous quarter, climbing to 73.1 points. In contrast, business expectations in the ICT sector have deteriorated slightly in comparison to expectations in the previous quarter. The corresponding sub-indicator has fallen by eight points to 62.3 points. Nevertheless, the value indicates that the majority of businesses have recorded an increase in revenues or demand in the first quarter of 2015.

The economic sentiment in the media sector has declined in the first quarter of 2015. Having reached a three-year high in the previous quarter, the sentiment indicator has now dropped by 11.1 points to 48.9 points. The fact that the indicator is now just below the critical 50-points mark indicates that media service providers are expecting a slightly negative economic development. In particular, business expectations have considerably worsened compared to the fourth quarter of 2014. Whereas the sentiment indicator remained stable at 66.7 points in the previous quarter, it has now fallen to 48.1 points in the first quarter of 2015. Thus, compared to the previous quarter the business situation has deteriorated for the majority of media service providers. The sub-indicator for business expectations has also slipped to just below the 50-points mark with a current reading of 49.7 points.

The positive sentiment among knowledge-intensive service providers has remained almost unchanged in the first quarter of 2015. After a decline of merely 0.5 points compared to the previous quarter, the sentiment indicator now stands at 63.3 points. Whilst business expectations have improved, expectations for the business situation have deteriorated. The sub-indicator for the business situation has dropped by 7.4 points compared to the previous quarter; the sub-indicator for business expectations, however, has increased by 6.1 points. Both sub-indicators have therefore reached similar values (61.7 points and 65 points, respectively), signalling a positive business situation as well as optimistic expectations for the next quarter.

For more information please contact

Daniel Erdsiek, Phone +49(0)621-1235-356, E-mail erdsiek@zew.de

The Economic Sentiment Indicator for the Information Economy

The Economic Sentiment Indicator for the Information Economy is composed of the four components sales situation, demand situation, sales expectations and demand expectations (each in comparison with the previous and following quarter). They are equally factored into the calculations. Sales situation and demand situation form a sub-indicator reflecting the business situation. Sales expectations and demand expectations form a sub-indicator reflecting the business expectations. The geometrical mean of the business situation and the business expectations is the value of the Economic Sentiment Indicator of the Information Economy. The sentiment indicator manoeuvres between values from 0 to 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.

ZEW Business Survey in the Information Economy

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, auditing (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. Combined, all nine sectors make up the economic sector of the information economy. The ICT sector consists of ICT hardware and ICT service providers. Sub-sectors 4 to 9 make up the knowledge-intensive service providers. Overview of the ZEW Business Survey in the Information Economy (in German) http://www.zew.de/konjunktur

Remark on the Projection

To ensure that the analyses are representative, ZEW projects the answers of the survey participants with the sales value of the businesses with regard to the entire sector of the information economy. The phrasing "share of the businesses" thus reflects the share of sales of the businesses.