Hopes that a boom in technology, media and telecoms (TMT) activity could offset the slump in financial services and property may be unrealistic, new research has suggested. A survey published last week predicts a downturn in the TMT sector because of funding problems faced by businesses.

Accountants and business advisers BDO Stoy Hayward reported that TMT businesses are finding it far harder to access capital in 2009 compared with last year. In 2008, 73% of TMT businesses said they found it easy to access new funding, while only 38% reported the same this year.

‘If this continues, there is a real risk that investment in research and development, the lifeblood of many TMT businesses, will dry up,’ said Julian Frost, head of TMT at BDO Stoy Hayward. ‘We’re hearing increasing levels of frustration being expressed by TMT businesses [who] need additional capital to meet their growth forecasts.’

Scott Singer, TMT sector head at City firm Denton Wilde Sapte, suggested that access to funds varies across the sector. ‘IT supply companies, the core TMT companies, are hardest hit, but other TMT companies are holding up well,’ he said. ‘Telecoms are rather more active because these companies are cash rich, and there’s quite a lot of investment in the sector, for example, in setting up mobile phone networks across the world.’

The survey covered 78 TMT businesses of all sizes across the UK. The research suggests that 55% of TMT businesses will not look to raise capital this year, compared with 17% last year. Only 14% plan to call on investment banks, private equity and the capital markets for finance this year, compared with 59% last year. The number of businesses looking for bank loans has risen from 9% last year to 17% this year.

At the end of last year, BDO Stoy Hayward research suggested the TMT sector would undergo extensive consolidation over the next two years.