European IT heading for recession

The European technology sector appears to be following the US into recession. The latest figures from the Infoconomist EuroIndex show the European IT sector falling fast. Growth in March 2002 fell to 7.1% from 10.7% the previous month. The industry looks certain to be in recession by mid-2002.

The European figures have at least stayed positive compared to the US-dominated Global Index. The worldwide index has now sunk to -14%, though it has started turning north in recent months.

Major negative influences on the EuroIndex came mostly from the services sector. Most notably, revenues at Cap Gemini and Computacenter slumped 13% in the companies’ closing periods of 2001, while Morse reported a 27% drop in its fiscal first half to the end of December. There were also lacklustre performances at Parity and CMG.

But IT services gloom was not universal. Logica managed an 11% jump in revenues in its latest six months, financial software and services giant Misys showed a surge of 26% over the same period, and Atos Origin was close to the industry par with a 6% rise.

Outside of services there were some notable casualties. France’s systems company Groupe Bull suffered a 21% revenue crash in its fiscal fourth quarter and handheld computer vendor Psion saw sales slip by 36% in the closing half of 2001.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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