Consumer confidence continues to increase steadily from the lows of 2003. Domestic demand is showing
moderate year on year growth. Our conclusion is that most companies' IT budgets are secure for the rest of
2004. We maintain our short term forecast that demand has bottomed out and will slowly increase in 2004,
though recent UK interest rate rises may well slow down growth going into 2005. We will be waiting for the
release of UK investment figures for 2004 in the new year, before this can be confirmed.

There appears to have been a stabilisation of the €/$US exchange rate ove the last few months at around
$US1.227 per €.

Quarterly Vendor revenues, using average of exchange rates over reporting periods, 2000 -2004

Nick Ballard
nick.ballard@cambashi.com

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