ANIS Sentiment Survey: The IT industry ended 2023 with results below expectations at the beginning of the year and approaches 2024 with moderate optimism

• The impact of fiscal measures from the end of last year is considered major (34%) or medium (62%) by companies in the sector
• In 2023, 44% of responding companies managed to grow their team, although at the beginning of the year more than 68% expected to end the year with larger teams
• At the end of 2023, 16% of companies indicated that they end the year with decreasing revenues, the percentage estimated at the beginning of the year at below 5%
• 62% report rising revenues for 2023, compared to 65% who anticipated this result at the beginning of the year
• For 2024, IT companies express moderate optimism, with increases in turnover and teams of 56% and 64%, respectively, but also with significant percentages in the stagnation zone

The IT industry expresses moderate optimism for 2024 after 2023 ended with results below expectations at the beginning of the year, data collected in the ANIS Sentiment Survey 2024 shows.

ANIS, the Employers’ Association of the Software and Services Industry, conducted the survey in December 2023, among member companies representing, in terms of revenue, approximately 65% of the entire IT software and services sector. Year-end results were below those estimated at the beginning of last year, and fiscal changes in 2023, considered to have a major (34%) and medium (62%) impact, led to relatively less optimistic estimates for 2024.

“Both the data from the ANIS Sentiment Survey, as well as the direct information from ANIS members, confirm a moderate optimism of the Romanian IT industry for 2024. The optimism is based on the projects that each company has in the pipeline, to a very large extent in foreign markets where our companies excel (in the first 9 months of 2023, the industry provided Romania with a record trade surplus of 3.7 billion euros), but also the specialists trained by the companies’ own efforts in the previous years of accelerated growth. The obvious need for digitization of public services, but also of the economy in general, could be a factor of optimism, only that many companies do not see it as a definite opportunity for their business. There is also a dose of pessimism that comes mainly from the unpredictability of public policies and the instability of taxation, which, as seen last year, can have a significant impact for most companies”, says Corina Vasile, ANIS executive director.

The optimism of the IT industry in Romania has been weighted since last year. If in the previous edition of the ANIS Sentiment Survey, published at the beginning of 2023, more than 68% of respondents indicated that they would finish the year with an enlarged team, only 44% of them finished last year with a larger number of employees. At the same time, if only 9.5% expected a decrease in the number of employees in 2023, at the end of the year 24% of respondents indicated that the company’s team had shrunk.

The better news comes from the volume of contracted projects. If initially 61% of managers expected the number of contracted projects to increase in 2023, at the end of the year 56% declared that these objectives were achieved. At the same time, 30% of companies reported maintaining the volume of projects at a level similar to 2022. The decrease was recorded in only 14% of respondents, although previously more than 30% of companies were more pessimistic in this chapter. Revenue estimates were also unchanged in the growing segment.

Thus, if at the beginning of 2023, 65% of the companies expected to finish the year with increasing revenues, 62% of them succeeded. On the other hand, although only 5% of respondents anticipated a decrease in income at the beginning of the year, the data at the end of the year indicated a decrease for 14% of them.

According to the ANIS Sentiment Survey, 64% of IT companies want to end 2024 with a larger team than in 2023. 28% of respondents expect their team to stagnate this year and only 8% believe it will decrease over the course of the year. Among the responding companies, 56% predict that they will have a higher turnover in 2024 than in 2023, 34% that it will be similar, and 10% take into account a possible decrease in revenues.

“The moderation of the anticipated increases and, especially, the significant percentages in the stagnation zone are not a good sign, in a period when Romania needs to quickly reduce the technological gaps compared to countries in the West and even in the CEE in order to remain competitive, and the economy and public services must be digitized rapidly. As I have said repeatedly, in addition to the negative impact in numbers of fiscal measures, they sent a confusing message in the economy, so that the industry no longer understands what the priorities are and what is the Government’s economic policy. Unpredictability in public policies, and especially in fiscal matters, materializes in below-potential economic results”, commented the executive director of ANIS.

Established in 1998, ANIS represents the interests of Romanian IT companies and supports the development of the local software and services industry, the growth of both companies involved in outsourcing projects and those that generate intellectual property, through the creation of products. Over 170 members. Within ANIS are represented both companies with Romanian or foreign capital, small or multinational, with headquarters in all the major IT centers in the country, which ensures the association representativeness at the national level. ANIS members generate a significant number of highly qualified jobs in society. With a representation of over 65% of the total revenues generated by the IT industry at the national level and approximately 42% of the total IT industry employees in Romania, ANIS is increasing its economic footprint at the local level year by year.