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Tech executives expect growth to begin slowing in 2012

May 31, 2012|By Salvador Rodriguez
  • Employees work at Viadeo, a social networking company, in Paris.
Employees work at Viadeo, a social networking company, in Paris. (Balint Porneczi / Bloomberg…)

Growth in the technology sector will begin slowing in 2012, according to industry executives who answered an annual survey released Thursday.

Though the sector is expected to continue expanding, 42% of executives said they expected only moderate growth of 1% to 6% in 2012, while in 2011 that figure was just 14%.

At the same time, only 15% of those surveyed said they expect growth higher than 7% this year, quite a bit less than the 36% who answered the same in 2011.

The annual Technology Industry Business Outlook survey was conducted by the KPMG consulting firm during April. It involved 122 mostly senior executives, most of whom work at companies with annual revenues exceeding $1 billion.

Along with slowing growth, the survey shows a similar outlook for revenue in the coming year. Those expecting significantly higher revenue than the year before dropped by 7 percentage points, while those expecting only moderately higher revenue went up by those same 7 points.

The survey showed that tech executives expect the amount of money their companies spend to begin slowing as well. The survey showed spending growth of 6% or more was anticipated by 27% of those surveyed, down from 31% a year ago, while more executives predicted spending growth of 5% or less.

Research and development spending was also anticipated to start slowing. Last year, 36% of those surveyed said they expected growth of 6% or more for R&D while this year only 29% said they expected that much. And once again, more moderate growth expectations was higher this year than 2011.

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