Tech firms' optimism on the up

The mists are clearing: 30 per cent of TMT firms are more optimistic about the coming quarter

Firms in the technology, media and telecoms (TMT) arena are increasingly confident about what the coming months will hold, research has claimed.

BDO Stoy Hayward surveyed a variety of UK TMT businesses with turnover between £10m and £5bn. The auditor found 30 per cent were more confident about prospects for the coming quarter than they were for the preceding one.

The same levels of confidence were maintained at 38 per cent of respondents, with only 32 per cent reporting a decline in confidence. More than 40 per cent of firms claimed project deferral was their biggest headache, with 30 per cent most concerned by a reduction in customer demand.

Other notable worries included customers failing to make payments, competitors slashing prices, retaining talented staff, public sector cutbacks and the availability of credit. BDO claimed companies have implemented a wide range of cost-cutting measures to try and survive the downturn.

These have included reducing staff levels, renegotiating supplier terms, acquiring or merging with rivals and focusing on gaining new customers. Closing under-performing business units, outsourcing core operations and focusing on sales productivity are among other measures adopted.

BDO's head of TMT Julian Frost said: "TMT has undoubtedly felt the impact of the economic downturn and the resulting slowdown in technology spending. However, companies in this sector have worked hard to introduce a number of cost-cutting measures in order to reduce overheads across the full range of business functions.

"Although confidence levels have declined, the fall has been less severe than might have been expected and companies now appear to be looking to the medium and long-term future with a reasonable degree of optimism."