01 June 1998

The UK economy is being propped-up by the IT industry, according to the Quarterly State of the Market report from the Chartered Institute of Marketing. In the economy overall, sales growth is sagging and individual production falling but the IT sector is outperforming the rest, primarily due to a massive increase in business IT requirements. This is attributed to companies' investment in state-of-the-art software and hardware systems, especially the upgrading of existing systems to ensure Millennium compliance and prepare for introduction of the Euro. Notwithstanding the trend, business investment in the UK remains buoyant and the construction industry has been boosted by major civil engineering projects such as the Millennium Dome and growing spend on the rail and communications infrastructure. Predicted sales growth for consumer durables like cars is forecast to fluctuate over the next three years from 4.9% this year to 4% in 1999, returning to 4.8% in 2000. Leisure services, primarily sport, entertainment and eating out, will remain steady, recording marginal growth from this year's level of 2.7% to 2.9% in 1999.