It's not a recession... well, not technically

The global IT industry registered negative growth for the first time in its 40-year history according to new figures.

August saw the revenues of an index of the top 200 global IT companies fall for the first time, in sharp contrast to the strong growth of previous years.

As little as nine months ago, when dot-com gloom had already wiped half the value off the Nasdaq stock exchange, the same index was still registering 16 per cent growth.

However, the figure still falls short of the technical definition of recession, which is understood to mean two consecutive quarters of negative growth.

The 200 companies in the index have a total quarterly revenue of about $150bn, so a one per cent fall would only be $1.5bn, a figure which pales almost into insignificance against the record-breaking quarterly loss of $19.2bn announced by Nortel in June.

However, there are numerous signs that the world economic picture may not be too rosy.

Today saw the surprise announcement that the US consumer confidence index fell to its lowest level in August - the continuing willingness of US consumers to spend money, which had been one of the few things holding the US back from the brink of recession, seems finally to be giving out.

One figure who is seriously worried is Warren Buffett, the financial guru whose strategy of 'value investing' has made him the world's second-richest man, but who shunned tech stocks during the dot-com bubble period of the last three years.

In an interview with BusinessWeek last week, he foresaw a prolonged "hangover" after the stock-market party of 1999 and 2000.

The wider economic picture is also discouraging. On Tuesday the International Monetary Fund posted an estimate for annual global growth of 2.8 per cent for 2001, 0.4 per cent down from its May forecast, and only 0.3 above the 2.5 per cent benchmark the IMF uses to define when the world economy is officially in recession.

The index of the top 200 technology companies is compiled by Infoconomy.