N.E. Tech sector stays strong, Fed reports

BOSTON – Profit margins stayed high and revenue was flat or better at software and information technology firms in New England in the second quarter, according to the latest report on economic conditions from the Federal Reserve Board.
The Fed’s latest Summary of Commentary on Current Economic Conditions – better known as the Beige Book, for the color of its cover – said nearly all the New England software and IT services companies contacted showed year-over-year revenue growth.
“At the extremes, one contact describes business activity as a ‘gentle ebb and flow,’ while another reports a robust pipeline and a 29-percent year-over-year increase in revenues,” the report said.
None of the software and IT firms contacted by the Fed reported plans to eliminate jobs, and some said they planned to add more employees.
One company said the labor market has stayed tight enough that the firm has increased average wages 10 percent since last year, with the biggest raises going to skilled engineers. Others reported offering more modest pay boosts of around 3 to 4 percent.
“Through the end of the year, most responding firms are projecting continued growth, but at a somewhat slower pace than recently,” the report said. Several companies contacted said the info-tech sector is usually the last to feel the impact of an economic downturn.
For more information, read the September Beige Book from the Federal Reserve online at www.federalreserve.gov.