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By Joey Gardiner, 19 November 2001 17:50

NEWS The CEOs of Britain's hardware and software vendors are getting more and more pessimistic about the economic future, and are in danger of dragging the UK into a psychological depression. The claims come in the latest survey from the Computing Services and Software Association's (CSSA), which found that 30 per cent of industry CEOs are fairly or very pessimistic about the short-term prospects for their business - the highest figure since the CSSA started taking its quarterly barometer in 1999. The number of pessimistic CEOs has nearly doubled since its last report in July when the figure was just 17 per cent. In addition 62 per cent of companies believe they will hire no more staff, or actually lay people off during the next three months. Similarly, half of the respondents said their turnover had not increased, or that it had actually fallen in the last quarter. Almost 45 per cent said they expect the same thing to happen this coming quarter. Tim Conway, director of industry affairs for the CSSA, said the report showed the industry is in a sorry psychological state: "This is by far the most pessimistic we've seen it. I think to an extent there's an emotional response to the terror attacks and to the war which just makes people feel depressed about future prospects." However, he added that the industry had helped create the downturn, by failing to anticipate the slowdown in spending after the Y2K spend in the late nineties. "This is a downturn people talked themselves into," he said. Conway added that many companies have issued profit warnings because pre-Y2K spending levels had not been sustained, and subsequently blamed a weak economy, creating the idea of an impending recession. Tony Lock, analyst at Bloor Research, concurred: "The overall position isn't as bad as many people make out - but it has got to the stage where it is a self-fulfilling prophecy. "There is hope out there - we have to make sure it doesn't get crushed by the inertia of the doom-mongers."