Recession? 🤷‍♂️ Europe IT Services Outlook: A Mid-2024 Snapshot

🐒 The Five Chimps Theory, Economic Outlook, IT Industry Summaries and Sustainable Pizza...

Every one is talking about a recession since more than a year already. But where is it? The question that no one can answer. Sorry, we will get a bit technical here, but it is important to understand where we currently are.

You can safely skip this part (unless you get a kick of watching graphs…) and jump straight to my conclusion below 👇

Since the start of the year, the Euro Area Services PMI (an important economy health indicator) showed consistent growth, offering a promising outlook for the IT services sector. Although in June 2024, the PMI has stopped rising and even dropped slightly to 52.8 from last month's 53.2, indicating that while the services industry (including IT) is still expanding, the pace is slowing down.

Despite this, there are positive signs; firms are optimistic, and domestic orders are strong even though international demand is cooling off. Business confidence is expected to improve as we move into the latter half of the year. This should encourage more companies to invest in upgrading their IT systems.

Based on the Sahm Rule Recession Indicator graph above, the likelihood of a recession appears to be low. As of May 2024, the indicator is at 0.37 percentage points, which is below the 0.50 threshold needed to signal a recession. But don’t you have the same notion that the direction is clear?

Conclusion?

No we are technically not in recession. The caveat is all those recession indicator are lagging. This cause some macro economists to state that in a few months we will discover, that we are actually during recession now 🤷‍♂️

Either way, looking ahead, with steady economic growth and stable inflation, the IT services sector in Europe is set to slowly but surely rise 💎 Companies should focus on capturing domestic opportunities while keeping an eye on evolving international markets.

What’s Happening in IT?

In recent weeks, the IT sector has been abuzz with advancements in AI, cybersecurity challenges, and increasing regulatory measures.

AI technology is rapidly evolving with new models and partnerships emerging regularly. At the same time, significant security flaws are being found in widely used systems, keeping cybersecurity a top concern. Regulatory updates are also becoming more common, signaling the need for greater oversight in the tech world. Moving forward, businesses will need to emphasize technological innovation, robust security, and compliance with strict regulations. Staying agile by investing in advanced tech and security measures will be crucial in navigating this complex landscape.

You can read more and find links to source articles in our Weekly IT Summary.

Sustainable Pizza

In my latest interview, I had an enriching discussion with Eric Rimon, a sustainable entrepreneur. He is an individual of diverse cultural and academic backgrounds, operates in various sectors including automotive, green energy, and now food services through his latest initiative, Ariel's Pizza.

Short summary is available here: Turning Green into Gold: How Eric Rimon is Transforming the FoodTech with his startup

Also I had an exciting and insightful interview with a significant EdTech voice, which will be soon published.

So, stay tuned!

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