UK tech sector enjoys strongest growth since financial crisis

POSTED: 2nd September 2014
IN: Industry news

British firms with aspirations of growth this year could be encouraged by some particularly strong trends in the technology industry.

British firms with aspirations of growth this year could be encouraged by some particularly strong trends in the technology industry.undefined

Recent research by professional services firm KPMG showed that the three months from April to June 2014 brought "robust" growth for the UK tech sector. The rate of expansion in business activity was higher than at any time since the start of the financial crisis in 2007.

In the latest KPMG/Markit Tech Monitor UK survey, six out of ten (61 per cent) companies reported a solid improvement in expectations for business operations in the year ahead and only six per cent forecast a decline in activity.

Four out of ten (43 per cent) said they have intentions to hire more staff, while 43 per cent anticipated growth in capital expenditure, up from the previous high of 37.5 per cent.

Other findings showed that profitability continued to improve in the tech sector in the second quarter, with an index reading of 54.7. Respondents said a healthy flow of new work, higher average selling prices and subdued cost inflation contributed to the strong earnings in the industry.

Welcoming the survey results, Tudor Aw, head of technology at KPMG, said the UK tech sector is "firing on all cylinders" and exceeding the rest of the economy with its sustained growth.

He added: "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.

"For the first time since 2007, there is also a welcome upturn in tech IPOs, which hopefully signals the beginning of a comeback of tech companies to the London Stock Exchange."

Technology is not the only industry that has shown strong performance this year, with small and medium-sized manufacturers also enjoying a healthy quarter of orders and output growth in the three months to July.

A Confederation of British Industry report showed strong increases in domestic orders and output for the fourth consecutive quarter, while employment in the sector increased at the fastest pace since records began in the late 1980s.

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