Digital gets the jitters: market and employment confidence shakey

Confidence across the digital sector plunged in September. Chinwag's Digital Pulse, a monthly confidence index for the digital industry, experienced the biggest single month fall (since its inception) of 7.5%. The Digital Pulse has been falling gradually over the last few months, with a slight uplift during the Summer, but this is the first sign of the chills affecting the wider economy may hit Internet businesses hard.

The mood across the digital sector had seemed upbeat. The IAB announced a 21% increase in online ad spend for the first six month's of the year, with the sector reaching a generous 19% share of the ad pie.

However, the news of lay-offs at ebay and Channel 4 with chilly predictions in the start-up world may well have dented this. Many working in digital now didn't experience the boom/bust of 2001, having only enjoyed and known a healthy employment market. This looks set to change, with the Digital Pulse showing confidence in finding new work falling a massive 12% between August and September.

The merest glimmer of good news comes from the confidence in market conditions six months from now. Whilst, showing a big fall of 5.9%, this a smaller fall than that in the current market. Good times ahead? Probably not, but at least they might not be quite as bad.

In the meantime (and in addition to doing the 6-question October Digital Pulse survey), this presentation from Sequoia Capital might provide a handy lesson in battening down the hatches:

Sequoia Capital on startups and the economic downturn