New business volumes rose at the slowest rate since mid-2013 due to uncertainty and delays with clients’ decision making ahead of the general election, according to the latest KPMG/Markit Tech Monitor UK survey.
But the tech sector is more positive about longer term growth and firms are still recruiting staff.
Almost eight times as many UK tech companies anticipate a rise business activity in over the next 12 months as those that forecast a fall.
The report found that tech sector employment has expanded by almost one-quarter since 2010, which is around three times the pace of the overall UK jobs market.
It estimated that the UK tech sector now directly accounts for at least one million jobs.
Commenting on the report, Tudor Aw, partner and head of technology sector at KPMG, said:
“This quarter’s Tech Monitor results continue the theme of a robust and thriving UK tech sector that outstrips the wider UK economy. Importantly, the sustained rise in tech business activity that we have seen in recent years has translated to reinvestment in capital expenditure and job hiring, again at a rate that has been much higher than other UK sectors. These results confirm the importance of the tech sector in helping drive growth and employment in the UK.
“Tech Sector employment shows the significance of the sector in the 21st century where technology is all pervasive. The UK tech sector has grown significantly, delivering three times the rate of job creation as the wider UK economy and now accounts for over 1 million jobs.”
The Tech Monitor UK survey respondents remained positive about growth over the coming year. However, there is evidence that renewed risk aversion within domestic and external markets has held back near-term growth momentum.
“It is an important message to political parties of all persuasion in the upcoming general election that the sector is worthy of support and focus, particularly when it comes to promoting the sector and investing in STEM based education that is so vital to meeting the demands of tomorrow’s tech businesses,” concluded Tudor Aw.
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