Information Economy in Germany - Significant Changes While Sentiment Remains Positive

At first sight, the economic sentiment of the companies in the information economy being surveyed by the Centre for European Economic Research (ZEW) on a quarterly basis seems unchanged. With a minus of 0.3 points and a current value of 58.1 points in the June survey, the ZEW Sentiment Indicator for the Information Economy lies above the crucial 50-points mark again in the second quarter of 2012. A positive economic development can thus be expected during the next months. Taking a look on the sub-indicators which compose the ZEW Sentiment Indicator Information Economy, however, shows that there are indeed remarkable changes. These changes can primarily be traced back to the ICT sector which is especially important for the information economy.

In the current survey, the indicators for expectations and the situation in the information economy are approaching each other significantly. The sub-indicator for the business situation in the second quarter of 2012 increases by 7.8 points. It currently reaches a level of 55.2 points and levels above the crucial 50-points mark below which it had fallen during the first quarter. The positive development, however, is being tarnished by the clear decline of the sub-indicator for business expectations for the third quarter of 2012. It decreases by 10.7 points and levels at 61.2 points. The economic optimism of the surveyed companies hence decreases clearly. However, with a value above 50 points, the expectations for the economic development during the third quarter of 2012 are still positive.

The decrease, especially of the sub-indicator for the business expectations, is in line with the tarnished expectations for the entire German economy in the second half of 2012. Accordingly, the ZEW Indicator of Economic Sentiment for Germany has for example also dropped significantly since May 2012. Nonetheless, the economic sentiment in the information economy is still quite positive for the next months.

A major cause for the slight decrease in economic optimism for the third quarter is the ICT sector. Although the sentiment indicator for the ICT sector only decreases by 0.7 points to a value of 61.8 points the still positive picture conceals a clear decrease especially of the expectations. In contrast, the negative economic sentiment within the media sector has hardly changed at all since the beginning of the year and the sentiment indicator for the knowledge-intensive service providers with a small plus of 0.8 points during the second quarter and a value of 59.7 points has also remained nearly stable.

Despite the still positive economic situation for the information economy, the trends of the sub-indicators show, that especially the strong optimism in the ICT sub-sector, which had been observed since the beginning of the year, now starts crumbling a bit.

For further information please contact

Miruna Sarbu, Phone +49 621/1235-334, E-mail: sarbu@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 8,000 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.

Overview of the ZEW economy survey (German language only)

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.