The European medical technology sector is weathering the current economic storm but bracing itself for tough times ahead, with two-thirds of firms making redundencies or introducing pay freezes.

These are the findings of a survey by European medical technology trade body Eucomed, which sampled 100 top executives at medical technology manufacturers across Europe.

Despite the Europe-wide economic recession, only 20% of survey respondents reported a significant negative impact on their business.

Yet the vast majority of respondents said they were nevertheless anticipating tougher times due to the downturn and the restructuring of healthcare systems.

Some 80% said that hospitals are struggling financially, price pressure has increased and tendering and contracting conditions have worsened.

Many executives said they have already started preparations to keep solvent, with most reporting they felt ‘well prepared’. Two-thirds said they were controlling costs by making redundancies or introducing hiring freezes.

Despite the deterioration in trading conditions, many also identified bright spots and future growth opportunities and one-third said new business investment has actually increased.

Some 40% of executives who participated identified pockets of growth for existing products and stated that they are confident about continued product launches over the next five years. Most also saw attractive opportunities in mergers and acquisitions and business development.

John Wilkinson, chief executive of Eucomed, said: "In these times of financial uncertainty, it is to be hoped that the industry’s customers see innovation as a key mechanism for responding to the pressures.

"The industry certainly has much to offer and appears committed to continue investment in research and development."

Last Friday, new figures showed that the Eurozone was experiencing a worse recession than previously thought. The 16-nation single currency zone shrank by 2.5% in the first three months of the year in comparison with the previous quarter.

Compared with a year ago, the Eurozone’s GDP fell by a record 4.6%, according to Eurostat.

Despite the depth of the Eurozone recession, executives at medical product companies across Europe predicted strong growth prospects. More than 50% expect over 5% growth for 2009 with two-thirds expecting more than 5% growth for 2010-11.