Feeds

Tech sector burnt by biz confidence meltdown

Recession, recession, recession

Combat fraud and increase customer satisfaction

Finance professionals’ confidence in the IT sector is slipping as UK businesses face the toughest trading environment since the early 1990s, according to a new report.

The Institute of Chartered Accountants in England and Wales (ICAEW) latest Business Confidence Monitor was published today. It revealed the index had dropped to -25.7 per cent for the three months ended 30 June this year, from -19.7 per cent in the previous quarter.

Meanwhile, ICAEW claimed that business confidence amongst finance professionals has hit an all-time low of -18.2 per cent, down from -17.5 per cent on the previous quarter, the results are measured against companies which are “slightly less” or “much less” confident about their outlook.

ICAEW operations and finance exec director Robin Fieth said: "We are seeing a new realism among businesses about the need to weather the current economic conditions with projected staff and capital investment both significantly down on this time last year."

He added that confidence in the business services sector – which up to now has remained relatively upbeat compared to other UK biz areas – fell sharply this quarter.

He attributed that decline to Blighty’s economic slowdown.

"We expect the slowdown to be at its worst towards the end of 2008 and into early 2009," he said. "We also expect inflation to start falling back from early 2009, allowing the Bank of England room to cut interest rates throughout 2009.”

“Nevertheless, overall the performance of UK plc through 2009 is likely to be the weakest growth since 1992 - when the economy grew by just 0.3 per cent. However, towards the end of 2009, providing wage inflation stays low, economic activity looks likely to pick up."

The gloomy comments line up with the British Chamber of Commerce’s (BCC) warning to its members today that the UK is set to fall into recession over the next two or three quarters, with zero or negative growth expected in the next quarter and negative growth in the following two.

Technically, a recession is when there is negative growth for two consecutive quarters.

The BCC also warned that UK unemployment figures looked set to climb by 250,000 to 300,000 over the next two to three years, reaching almost two million.

“Whilst a marked slowdown in activity is likely over the next 18 months, even if interest rates are cut when inflation peaks, the correct policy decisions are still needed to ward off the threats of a serious and prolonged recession,” said BCC director general David Frost. “The longer the MPC waits before cutting rates, the bigger the danger that the economic situation would deteriorate.”

In June accountant firm BDO Stoy Hayward BDO warned that the number of business failures in 2009 could be the highest since the dotcom bust in 2002. It forecast an 18 per cent leap in company insolvencies to 19,124 in 2009, compared with 16,168 in 2007.

However, it was somewhat more positive about the industry by saying that technology, media and telecom sectors would largely steer clear of the downturn as businesses attempt to claw back spending by investing in IT. ®

3 Big data security analytics techniques

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
prev story

Whitepapers

Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.