FAZIT Company Survey by the ZEW - Sentiment More Pessimistic Among Baden-Württemberg-Based Companies

Around 20 percent of the companies based in the federal state of Baden-Württemberg currently assess their business situation as positive. 23 percent assess it as negative. About 57 percent are satisfied with their business situation. This shows that the sentiment among companies has again deteriorated compared to the FAZIT company survey in the summer 2008. This is one of the findings of the seventh FAZIT company survey conducted by the Mannheim- based Centre for European Economic Studies (ZEW) in Baden-Württemberg in November and December 2008.

In contrast to the FAZIT survey in the summer 2008, the companies in Baden-Württemberg assessing their current business situation as negative are now in a slight majority. Companies from the sectors IT and media in particular state that their business situation has deteriorated. "The positive expectations for the sectors IT and media, which we found in the summer 2008, were not met," says Benjamin Engelstätter, researcher in the department information and communication technologies at the ZEW. "Currently, only 15 percent of the companies in this sector assess their business situation as positive. In the summer 2008 this was stated by 26 percent."

The pessimistic sentiment is also reflected in the operating sector of the information and communication technologies, although it is not as negative. Within this sector, transportation service providers particularly show a negative sentiment. On balance they assess their current business situation as particularly bad at minus 24 percent.

While companies with more than 20 or fewer than 249 employees assess their business sentiment on balance as good, companies with fewer than 20 or more than 250 employees state a negative situation. On balance the Baden-Württemberg-based companies expect their business situation to further deteriorate by mid 2009. The balance of "good" and "bad" expectations has decreased to minus 11.7 percent in the current survey. Around 59 percent expect their business situation to improve. Negative expectations are in the majority among companies from operating branches and the sectors IT and media. Operating branches are, at a balance of minus 17 percent for the coming six months, clearly more pessimistic than the sectors IT and media. Within the operating branches, the companies in the processing industries in particular prognosticate a negative development for their businesses. On balance, all expectations for companies of all sizes are currently pessimistic. However, larger companies assess the future business development as more negative compared to smaller companies. Particularly companies with more than 250 employees expect their business situation to deteriorate within the coming six months. On balance, their expectations have dropped to minus 50 percent.

The consequences of the more pessimistic sentiment among the companies vary. On balance, 1.6 percent of the Baden-Württemberg-based companies expect an increase in staff for the coming year. On a balance of 1.4 percent companies of the operating branches expect staff to be reduced, while companies of the sectors IT and Media expect the number of employees to increase. Companies with fewer than five of between 20 and 249 employees are planning to extend total staff on balance. In contrast, companies with five to 19 employees and large enterprises with more than 250 employees are planning on balance to reduce staff within the coming twelve months.

The FAZIT Company Survey

The "Research Project for Current and Future IT and Media Technologies and Their Use in Baden-Württemberg" (FAZIT) is a research project of public utility sponsored by the federal state of Baden-Württemberg (www. Fazit-forschung.de). Around 1000 Baden-Württemberg-based companies from the sectors IT and Media participate in the current survey (software, data processing service providers, IT and media hardware, telecommunications, audiovisual media, printing and publishing, advertising and promotion, content providers) as well as companies from other branches using IT and media technologies (chemical industry, engineering, medical technology, metrology, control technology, control engineering, automobile, transportation, banking- and insurance industry, research and development and technical service providers).

For further information please contact

Benjamin Engelstätter, Phone: +49/621/1235-134, E-Mail: engelstaetter@zew.de