This is the first report incorporating material from conversations with firms producing software and information technology services. Most contacts say revenue growth is strong this year to date. However, some cite decreased demand for their products due to factors associated with the particular markets they serve, and some cite a temporary drop in demand earlier this year due to heavy spending on Y2K-related activities late last year. Both groups report that they continue to spend heavily on new product development, and often cite the need to keep up with changing technology. Most respondents are increasing employment, although some report small decreases.
Many contacts indicate that high turnover is a problem, especially among younger employees.
However, turnover rates generally seem to be stable. Average salary increases at most companies are in the 6 to 10 percent range. Salary increases tend to be higher for technical employees than for non-technical employees, and higher at firms located close to Boston. Temporary Employment Expansion at First District contract employment firms continues, with overall revenues about 20 percent higher than year-earlier values. Wages are up 5 to 10 percent from year-earlier, and Internet workers are receiving even greater increases.