Software and IT services companies in New England had a good 2010 and are looking at a good 2011, according to the Federal Reserve Bank of Boston's Beige Book, released earlier this month.
The Beige Book, formally the Summary of Commentary on Current Economic Conditions, is a report of "anecdotal information on current economic conditions" by each Federal Reserve Bank in its district based on interviews with bank staff, economists, market experts and key business leaders in each district.
Those who spoke to the Boston Fed for the March Beige Book painted a bullish picture of the IT economy. Year-over-year revenue growth at IT firms in the district ranged "from 3 percent to 25 percent in the most recent quarter, with most in the double digits," the Beige Book reported.
Contacts report increased demand for software and IT services from the industrial, medical, and education sectors, although some corporate clients remain unwilling to finalize deals. Increased activity has led most respondents to increase their headcounts; indeed, two plan to grow their staff by 10 percent in 2011. Wages continue to trend upward, with most respondents awarding annual increases in the 3 percent to 5 percent range.
The Beige Book also reported:
- Business contacts in the district also told the Fed Budgets for IT and capital projects are unlikely to change in 2011.
- IT firms said they were facing less pressure from customers to discount their offerings.
- Most It firms expect steady or faster revenue growth in 2011.