Nuclear winter? Technology has a micro-climate

Vinnie has kindly written on our Recession communications course. There’s very deep interest in this topic, and our webinar on the topic had our highest-ever number of registrations.

Vinnie compares the cooling of the high tech markets to the ‘nuclear winter’ of January 2002, when that course last ran. However, there’s another climatic comparison that can be made. In he US in particular, high tech is something like a microclimate. As a whole, the US economy should continue to grow modestly. The Dow Jones index, which tracks industrial stocks, hit a new record yesterday. Unemployment has just dipped slightly, partly aided by tight quotas restricting the hiring of foreign talent. Military spending plays an important role for US industry, since orders for non-military capital goods have declined. Indeed, there some inflationary pressure: In discussions here in California this week, senior staff complain about the rising cost of staff.

However, technology and telecoms remain under pressure. The Nasdaq index slipped for the third day in a row, and still remains below the level from which it fell sharply in late February.

Consumers’ expectations are negative in the US, which is especially difficult for firms in consumer markets. For example, stock in Apple Inc. has fallen over the last month ending a long rise in the share price since last summer. It is now back at $90, where it was in November. So far this year, the Amex computer and network indexes are up by less than one percent, which must be building up shareholder pressures on executives.

So, while generalized recession seems unlikely buyers, suppliers and analysts in the tech industries are living in a challenging microclimate that is creating growing pressures for AR managers and their communications colleagues.

P.S. Of course, the softer tech and consumer markets overlap doubly here in the Bay area: Mortgage defaults here have risen, to an 11 year high, while housing rents are (according to the Metro, a local paper here) one third higher than the national average.

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