Confidence across the digital sector plunged in September. Chinwag's Digital Pulse, a monthly confidence index for the digital industry, experienced the biggest single month fall (since its inception) of 7.5%. The Digital Pulse has been falling gradually over the last few months, with a slight uplift during the Summer, but this is the first sign of the chills affecting the wider economy may hit Internet businesses hard.
A sharp intake of breath underscores the analysis of this Digital Pulse. The index has been falling slowly for the last few months but the global financial turmoil is clearly affecting the digital sector. The overall index is down 7.5% this month, but the real wobbles are in current market confidence which has plunged by 9.4% between August and September.
June’s results showed an
overall increase in market confidence from May, coming in at 123.0 (up 1.4%).While specific confidence
in current market conditions continued to slide - as did faith in the
economic environment in six months time - the overall index reflecting sentiment
about conditions in the future increased, up to 126.1 (up 4.4% on
May's results show another fall in overall confidence - a drop in the Digital Pulse of 3.87%. However confidence in future conditions, 6 months from now, has fallen less, by only 2.5%.
From the figures, it could be tempting to conclude that feelings within the digital sector are on the slide but the index of future conditions may point to some light at the end of the tunnel. Although it's dropped, the figure is quite low and may indicate a general slowing of business rather than a race towards the edge of a cliff. Let's hope so!
The method for calculating the Digital Pulse has been adjusted to give a more accurate reflection of the industry's confidence, based on feedback from March's results. Using this new algorithm for both March and April's results, confidence dropped 2.5%, with most of the other indices showing small drops in confidence.
Too early to say? Despite the doom and gloom being espoused by the traditional media, there's few signs (yet, thankfully) of the digital sector catching the jitters. From informal chats, it appears that watch and wait is the order of the day.
