In March, the index for the current business situation in the digital sector fell only moderately by 2.8 points to 39.8 points. In contrast, the decline in digital companies' expectations for the near future was dramatic: The index of business expectations for the next six months plummeted by 21.8 points in March and, at -3.9 points, is back in negative territory for the first time since June 2020. Bitkom-Ifo Digital Index, which is calculated from the business situation and business expectations, fell by 13.1 points and is now at 16.8 points.
"The criminal Russian war of aggression in Ukraine has reversed the previously prevailing confidence in an economic recovery. Despite the continued excellent current business situation, expectations for the next six months are cautious,"
says Bitkom President Achim Berg.
"It's little consolation that the business climate in the digital sector remains much better than in the economy as a whole. This war shows us how important digital sovereignty and resilience are. Digital technologies are indispensable for strengthening the security and capacity of democracies to act, especially in crises like the pandemic and in the face of military threats."
Inflation rate in the digital sector remains high
Despite the gloomy mood, companies intend to create additional jobs. Although employment expectations declined by 4.1 points, they remained significantly positive at 30.2 points. This means that the vast majority of companies plan to hire additional workers in the next three months. Berg says:
“The demand for digital specialists remains high.”
The price expectations index rose by 0.7 points to 37.2 points in March. This means that the inflation rate remains at a very high level, even in the digital sector. By comparison, in January 2020, before the coronavirus pandemic, this index stood at 15.2 points, the third-highest value since the survey began in 2006.
The mood in the overall economy has also deteriorated significantly since the beginning of the war in Ukraine. The Ifo business climate index fell by 16.8 points in March and is now negative at -1.4 points. The business situation fell by 3.7 points to 21.1 points. Expectations fell by 28.0 points to -21.7 points.
