Thursday, August 26
Economic news continues to dominate the media as concerns are expressed about a so-called double-dip recession, new applications for unemployment increase, local housing sales continue to slow and some economists begin to express concerns over deflation. In fact, I recently saw an article on CNBC in which economist David Rosenberg with Gluskin Sheff posited that we’re actually in a depression at this point, drawing intriguing comparisons to 1929-1930.
These uncertainties appear to be affecting the regional tech sector as well as our most recent quarterly survey showed a slight reversal of some positive trends from the first quarter survey.
But, in spite of the tepid economy and general uncertainty, the regional tech sector is performing mostly okay, especially compared to the last few years.
Some key reported results from the survey include:
- 61% of respondents reported 2nd quarter business performance was good or very good
- Down slightly from 66% in the 1st quarter, but the highest results since the 2nd quarter of 2008
- 58% reported results were better or much better than the 1st quarter for 2010
- Down from 74% in the second quarter, but still higher than any quarterly report in the last five years
- 70% reported performance was better or much better than the 2nd quarter of ‘09
- Down slightly from last quarter, but still higher than the last five years
- 76% believe the next 12 months will be better than the last 12 months
- Down from last quarter, but this measure has consistently see-sawed back and forth for several quarters
- 57% are planning to increase staff this year
- Down slightly from last quarter, but still higher than at an point in the last two years
Basically, reported results are strong as most are higher than any results over the past several years. While these results reflect a generally improving business climate for the tech sector, I’m concerned about trends in current quarter results and business expectations for the coming year. Those two data points show current results, but are also a little bit of an early warning for future quarters.
The full NEOSA Quarterly Survey Report can be found here.
Posted by:Brad Nellis