EDP service providers: Has the recovery begun?

The moderate recovery in the German software and EDP service sector should continue in the winter half-year 2004/2005. The Ifo Business Climate having remained more or less unchanged in the first half of 2004, the indicator resumed its recovery course in October: the current business situation and expectations for the next six months were again assessed more favourably. The lively demand for software and data processing services brought about a sales plus for the enterprises during the past two to three months, and the comparable previous-year sales were slightly surpassed. However, small and mid-sized companies see themselves faced more strongly with financing difficulties than in the previous months. They report problems in maintaining their credit lines or in procuring fresh loans. Commercial banks are increasingly withdrawing from loan financing, and high-tech businesses are facing difficulties securing the necessary venture capital.