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Growth in the IT sector in August continued the gradual decline that has been evident for the past 10 months. The Infoconomy Global Index, which charts the rate of revenue growth at the world's 200 largest IT companies, dropped by 0.3% during the month to 8.5%.

That global index, which is predominantly influenced by US companies, was tracked closely by the performance of companies with European roots. The 50 vendors that provide the basis for the European Index dropped 0.3% to 7.2%, down from a high of 9.8% in April.

Although with 8.5% growth the sector overall remains in relatively good health, weak performances by some major vendors contributed to the continued erosion. Revenues at application development tools company Borland slumped 13% in the company's latest quarter; IT service provider Electronic Data Systems reported a 1% downturn in revenues; network and Linux operating system supplier Novell turned in revenues 5% lower and sales at Sun Microsystems shrunk by 4%. There was also below par growth at CRM software vendor Siebel and Sun's forthcoming acquisition, StorageTek, both of which clocked up just 4% growth.

European companies showing below average growth included IT services group Atos Origin (4%) and business applications vendor Intentia (4%).

But there were plenty of upbeat numbers elsewhere in the sector. Networking equipment supplier Avaya produced a revenue rise of 22%; business intelligence software vendor Business Objects grew by 18%, Cisco chalked up 11% and Dell's quarterly revenues were up 15%.

These solid performances from the giants of the industry indicate that the erosion is petering out and that the index will stabilise at around 8% in coming months.

The Infoconomy 200 Index measures the overall growth rate of the IT industry by tracking the financial results of the world's most important publicly listed IT companies.

	Infoconomy index of IT sector growth