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By Joey Gardiner, 9 January 2002 16:30

NEWS There will be no early recovery for the European IT industry, despite a host of promising economic signals coming out of the US. However, industry analysts are confident the situation will not get any worse. The predictions follow a number of announcements in the last week that indicate a renewed strength in the US high-tech sector. The year began with chips stocks rallying strongly on improved expectations from the major processor players. Then Compaq surprised everyone by saying it will beat previous financial predictions and report a profit when it announces its fourth quarter results next week. Yesterday, the good news continued with Cisco boss John Chambers claiming his company was registering "dramatic" increases in market share, despite being unclear how near the US was to a rebound. Oracle has also reaffirmed the positive predictions it made in December and said it was "upbeat" about the year ahead. CFO Jeff Henley told CNN: "We definitely think the worst is over and things are going to start getting better." The latest figures also indicate e-tailers have had a healthy Christmas. The Nasdaq has risen six per cent since the turn of the year. Similar signs have been seen In Europe with SAP today announcing it was on course to beat revenue estimates for the year. Investment bank Credit Suisse First Boston said almost nine out of 10 high-tech companies will meet or beat financial expectations on the next quarter. The days of rafts of profit warnings seem to be well behind us. CSFB European equity strategist Kevin Gardiner said the rebound was already happening in the US, but Europe, as ever, was lagging behind somewhat. He said: "In Europe some bits of technology are looking safer than others. The over-enthusiastic rollout of telecoms networks in the boom is still hitting that area hard, but software and semiconductors can start to feel much more positive. "In looking for an upturn in Europe, one just has to be selective." However, from other angles the situation still looks gloomy. David Rippon, chairman of IT directors' association Elite, said he'd seen no sign of any of his members having their purse strings loosened. He told silicon.com: "There is no relaxing in IT budgets from anyone that I've spoken to - IT directors just aren't spending any more yet."