The Nasdaq is down 60 percent from its record peak last year, but the U.S. economy is providing mixed signals. The U.S. economy is showing signs of revival. The latest economic data from the United States, including the Producer Price Index, consumer confidence, and housing reports, all show optimism. In addition, President George W. Bush's tax cutting plans should have a positive effect on the U.S. economy. Hopefully this indicates that after the U.S. has enjoyed such outstanding growth over the past decade, its current problems amount only to a mild recession, a correction that will not lead to a deeper recession.
Analysts are in agreement that the U.K. economy is currently in good shape.
Therefore, if the effects in the United States are mild, then the United Kingdom and Europe could escape relatively unscathed. However, as the IT industry is global, it is likely that IT will be affected more than some other industries. If the U.S. problems prove to be deeper and last longer than expected, then it is relatively certain that the economies of the United Kingdom and Europe will suffer in a similar manner to that of the United States. This is obviously a worrying time for the whole industry, particularly the big players, although the industry must not panic and worry itself into a depression. The recent hopeful signs in the U.S. economy are an encouraging counterbalance to the cutbacks in workforces by major players.