Technology companies benefit from "budget flush": RCM

Mr Price, who manages the RCM Technology trust, said companies eager to spend the year's budget before the end of 2009 are providing a welcome boost for technology firms.

He said: "The rise in the market has helped many companies feel a little bit better about their future and to hope their business is stabilising and starting to recover.

"If companies are planning to grow their annual budgets, then they often get a head start by releasing and spending their budgets at the end of the year.

"This is what we think is going on now."

Mr Price said there were three main areas where a "budget flush" occurred.

First, many companies have no choice and are required to spend money on specific areas, such as regulation or security.

Second, companies are starting to invest in storage - an area that can be deferred for some time when attempting to tighten belts, but will eventually become necessary as existing data storage runs out.

And third, according to Mr Price, is in upgrades and "nice to haves", whereby companies are spending excess budget on improvements such as upgrading PC packages.

Mr Price said, thanks to this trend, the technology sector looks to be recovering well compared with many other parts of the economy.

"In contrast to the consumer, many companies have begun rebuilding their balance sheets and now have the ability to spend money on increased capacity and increased productivity," he said.

"For many corporates, the mantra now is 'let's spend money to save money', and this means investing in technology."