Covid-19 depresses mood in digital industry

The business climate in the digital sector deteriorated significantly in March due to the coronavirus crisis. One in three companies in the IT and telecommunications sector (31%) recorded a decline in demand in March.

While 55% of companies noted negative consequences of the coronavirus crisis, 43% reported that the pandemic had no impact on their business activities.

Only three percent noticed a positive effect. In the digital sector, industry and trade are particularly affected by the negative consequences. This is the result of the monthly economic survey conducted by Bitkom and the ifo Institute in the ICT sector.

The Bitkom-ifo digital index, which is calculated from the assessment of the business situation and business expectations, currently stands at just 0.6 points - down from 24.6 points in February. This is the lowest value since the height of the financial crisis in 2009.

A majority of companies expect the business situation to deteriorate further over the next six months, with the balance of expectations falling by 30.9 points to -18.4 points. This is the sharpest decline within one month since the first survey in 2006.

The current business situation, on the other hand, is still viewed positively by the majority, even though at 21.6 points it is 15.7 points below the February value.

"Companies in the IT and telecommunications sector are assessing their economic prospects better than the economy as a whole. However, the coronavirus crisis has already made itself felt in the order books of Bitkom companies and is having a measurable impact on sentiment"

says Bitkom President Achim Berg. The mood in the economy as a whole experienced a slump. The ifo business climate turned negative and plummeted to -11.8 points.