ZEW Business Survey in the Information Economy - Companies in the German Information Economy Sector Are Optimistic

Six months into the year, economic sentiment among the companies in the information economy sector continues to be optimistic, as suggested by the current reading of the Economic Sentiment Indicator for the Information Economy. The indicator takes into account the companies' current business situation and business expectations. With a current value of 63.7 points, the sentiment indicator clearly exceeds the critical 50-point mark, signalling a positive economic climate in the information economy. This is the result of a survey in the information economy conducted by the Centre for European Economic Research (ZEW) in June 2015.

Compared to the first quarter of 2015, the sub-indicators for the business situation and the business expectations both have barely changed. The sub-indicator for the business situation reaches a reading of 61.3 points in the second quarter of 2015, which corresponds to a 0.9-point increase compared to the previous quarter. Despite a slight 0.2-point decrease, the sub-indicator for business expectations for the third quarter of 2015 stands at an even higher reading of 66.2 points. Taken together, these indicator values show that the majority of companies in the information economy are optimistic about both, the business situation in the second quarter and the business expectations for the third quarter.

The information economy sector consists of the sub-sectors information and communication technologies (ICT), media service providers, and knowledge-intensive service providers. The largely positive economic sentiment among ICT companies has improved once again over the past quarter. The sentiment indicator has grown by 3.1 points to a total of 70.6 points – a two-year high. Promising forecasts for the third quarter have considerably contributed to high spirits in the ICT sub-sector. The corresponding sub-indicator for business expectations has climbed to an impressive 75 points. The 66.5-point reading of the sub-indicator for the business situation is just as remarkable, showing that the majority of companies have seen positive trends for sales and demand.

Economic sentiment in the media sector has brightened up in the second quarter of 2015. Following a reading slightly below the crucial 50-point mark at the end of the previous quarter, most media service providers have returned to a positive assessment of the economic climate. The sentiment indicator has increased by seven points compared to the previous quarter, reaching a current total of 55.9 points. This positive trend is largely due to the optimistic forecasts made by media service providers. The sub-indicator for business expectations has risen to 61 points, a quarter-on-quarter increase by 11.3 points. At a current reading of 51.2 points, the sub-indicator for the business situation only just exceeds the critical 50-point mark.

The knowledge-intensive service providers assess the economic climate less positively than in the previous quarter. Nonetheless, the continuously high level of the sentiment indicator at 60.2 points suggests a positive overall trend. The sub-indicator for the business situation has reached 59.6 points, while the sub-indicator for business expectations for the third quarter currently reads 61 points. Both indicators have dropped compared to the previous quarter: the sub-indicator for the business situation by 2.1 points, the business expectations sub-indicator by 4.2 points. Companies in the "research and development" sub-sector have a particularly positive assessment of the economic climate.

For more information please contact

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

The Economic Sentiment Indicator in 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 taken into account for the calculations. The sales situation and the 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 in the Information Economy. The sentiment indicator can take on values from 0 to100. 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 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, 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. Combined, all nine sectors make up the economic sector of the information economy. The ICT sector consists of ICT hardware and ICT service providers. Sectors three to nine make up the knowledge-intensive service providers.

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.