The Infoconomy EuroIndex, which tracks the revenue growth of the 100 most prominent European high-tech companies, sank to a new low of -4.3% in August 2002. That marks the tenth consecutive month of decline and contrasts dramatically with the picture just a year ago when growth was riding high at around 16%.

The European situation may look bleak, but the downturn is still not as severe as in the US-dominated Global Index. For August, that worldwide measure was sitting on -8.6%, albeit a steady improvement from the low-point of -14% in January 2002.

Two-thirds of companies reported shrinking revenues. Large services companies pulled the index down the most, including Cap Gemini Ernst & Young (with a 16% fall in latest period revenues), CMG (where sales were down 3%), Morse (down 21%) and Diagonal (down 25%). Software companies mostly performed badly. The biggest falls in revenue were at Iona (down 49%), Micromuse (-45%), Check Point Software (-24%), Software AG (-22%), IFS (-18%), Royalblue (-16%) and London Bridge (-13%). Less dramatic, but still alarming given their status among Europe’s biggest software companies, was SAP’s 4% fall in revenues and a 2% decline at Mercury Interactive.

But the downturn was not universal. Dassault Systemes and Business Objects showed healthy growth, while Intentia, Scala and Unit 4 Agresso all managed single-digit growth. On paper, the largest positive influence on the index was Misys. The financial software vendor posted a 25% revenue jump in revenues in its latest period, but that is solely attributed to acquisitions. The positive numbers mask the underlying trend, however. For European IT, the recession has some way to go before bottoming out.