How IT and Industry Affects the Stock Market

If you were to look at the social media landscape and the different platforms out there, you would see how Industrials has overtaken most of them. While a few industries have managed to hold their own, most have seen their revenues drop as competition grows. Industries like the auto industry, where sales have been stagnant for a decade or so, and the electronics industry, which had strong sales in the past but is now seeing a decline because of the iPad and other smart phone technology, are witnessing declines in business from this sector. While many experts attribute this decline in sales to the shift to digital media and the rise of social media, one thing that remains a popular debate is the impact of IT and Internet businesses on this segment of society.

The fact is that IT and industrial companies still have a huge impact on the economy. One economic indicator that IT and industrial companies can hold up to is the unemployment rate. The unemployment rate for IT related jobs has been steady at 2 percent, while the corresponding rate for those in the service sectors rises above 6 percent. However, this does not mean that these IT and industrial companies are not doing their part to contribute to the economy. Instead of looking at the positive aspects of this segment of the economy, most critics look at the negative aspects, and blame it on the economy.

Since the demand for IT services far exceeds the supply, the demand-supply imbalance causes the prices to fluctuate and lead to mass layoffs. This mass reduction in employment levels in the service sector coupled with the inflation of the cost of living pushes the economy into recessionary conditions. In this sense, IT and industrial companies have not done anything to affect the economy, yet the stock market seems to be taking the heat.