"A lot of companies are starting to hire again," Berthold told a news conference to publish the findings of Bitkom's regular industry survey.

Around 46 percent of companies polled said they intended to boost hiring, while 12 percent intended to downsize their workforce, the survey showed.

A total 741,000 people are currently employed in the sector.

During the past three years, as many as 4,000 companies in the sector had failed as a result of the bursting of the Internet bubble. But the process of restructuring was largely complete, Berthold said.

And the "IT and telecoms sector will again become the engine driving the whole economy", he predicted.

Bitkom predicted that sector-wide sales would rise by 2.5 percent to 132 billion euros (175 billion dollars) this year, and growth would accelerate to 3.4 percent in 2005.

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