"In the face of macroeconomic uncertainty, technology companies tend to conserve cash and exhibit less tolerance for earnings volatility," Fisher said in an email response to questions about the report. "These responses either dampen companies' appetites for acquisitions or requires them to spend far more time evaluating potential deals to avoid earnings dilution; thus reducing M&A activity."
Last year a large degree of uncertainty was caused by the U.S. presidential election. "With candidates presenting starkly different visions for American economic policy, technology companies spent ten months of the year attempting to divine which of the many pundits might be right in their predictions of the outcome and its knock-on effects to the economy," PwC said.
The fiscal cliff also caused anxiety that dampened spending. The fiscal cliff, a series of government spending cuts and tax hikes set to kick in by Jan. 1 if a budget compromise was not reached, was averted by an 11th-hour compromise on taxes. The sovereign debt crisis in Europe, with Greece and Spain debt levels skyrocketing, caused concerns that the euro zone would not survive, though ultimately the European Central bank stepped in with financing plans that quelled anxiety.
But the fiscal cliff compromise in the U.S. did not include a deal on spending, and Friday the so-called "sequestration" of government funds -- amounting to $85 billion in automatic across-the-board spending cuts -- started to kick in. In addition, recession is forecast for several E.U. countries this year.
The U.S. Department of Commerce on Thursday reported that gross domestic production in the fourth quarter increased at an annual rate of 0.1 percent -- better than the 0.1 percent decrease forecast by some analysts but nowhere near the rate needed to bring unemployment down significantly.
Meanwhile, the Nasdaq Computer Index edged slightly higher Friday in afternoon trading as major U.S. exchanges and indices rose. On the Nasdaq, Apple shares declined by $8.20 to $433.20, but that drop was offset by gains in shares of Oracle, Microsoft, Google, Intel and Dell. On the New York Stock Exchange, Hewlett-Packard and IBM shares were trading up for the day.
The Dow Jones Industrial Average, the Standard and Poor's 500 index and the Nasdaq all closed out February higher for the month. However, markets have had a roller-coaster week as the March 1 deadline neared for the start of the government budget sequestration. Economic uncertainty is unlikely to end soon.
"As companies continue to focus on core businesses, digest strategic acquisitions of the last decade, and work to scale these already acquired offerings," the PwC report concludes, "we may see a similarly subdued environment in 2013."