UK technology sector sees strongest growth since 2007 crash

KPMG survey finds 61% of technology businesses reporting improved revenues and expect this to continue

The UK technology sector has seen its strongest growth since the start of the financial crisis in 2007.

KPMG said that, between April and June 2014, the technology sector saw its most robust growth in seven years.

The KPMG/Markit Tech Monitor UK research indicates a recovering economy provided the ground for growth in the UK technology sector.

The survey said 61% of technology businesses reported improvement and expect this to continue over the year ahead, while 6% are expect it to fall.

The Tech Monitor surveys 150 small, medium and large technology companies quarter by quarter to get a consistent overview.

The research said capital expenditure plans in the technology sector are at their highest since this particular data was collected in 2009 – 43% are expecting an increase up from the previous high of 37.5%.

Tudor Aw, head of technology at KPMG, said the technology sector growth in the UK is outstripping the wider economy.

“Importantly, this good news story looks like it will continue in the year ahead with many tech companies planning to loosen the purse strings to hire staff and raise capital expenditure,” he said.

“For the first time since 2007, there is also a welcome upturn in technology initial public offerings (IPOs), which hopefully signals the beginning of a comeback of tech companies to the London Stock Exchange, something that will be important in convincing technology startups that the UK is the right place to be.”

Meanwhile, 43% of technology companies are intending to hire more staff over the next 12 months, with only 6% intending to make redundancies.

Tim Moore, senior economist at Markit, said: “On the job-hiring front, the latest figures suggest tech companies have taken a slight breather after several years of breakneck growth, contrasting with the scramble to boost employment in other areas of the economy, such as house building, that have seen prolonged cuts to capacity prior to the recent rebound. 

"However, the moderation in tech hiring in the second quarter of 2014 looks unlikely to become entrenched, given the strong staff hiring intentions and spending forecasts reported by tech companies in the latest survey.”

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