Tech firms remain pessimistic as recession deepens

Half of IT companies expect demand to fall over the next six months

Technology firms are expecting falling profits and increasingly tough times to come, according to the latest tech sector survey from the Economist Intelligence Unit.

The biannual Tech Sector Barometer survey found that just one in five companies is expecting demand for its services to rise over the next six months, while almost half expect demand to fall.

Worse still, investment in research and development is also likely to fall, with almost four-fifths of organisations admitting that their R&D activity is likely to stay the same or "slacken".

One fifth of respondents expect the situation to worsen over the next six months, and almost half expect problems to continue after this period.

Hardware firms were the least positive; over half expect to see a decline in demand over the next six months, while just 10 per cent of firms questioned said that they expect their financial health to improve.

"The industry clearly sees little chance of an early recovery," said Carla Rapoport, director of industry briefing and forecasts at the Economist Intelligence Unit.

A total of 367 telecoms and IT executives took part in the survey. Overall, telecoms firms were more positive than those offering hardware and software.