Business volumes for UK tech firms rose at the slowest rate since mid-2013, mostly because of uncertainty and delays with clients’ decision making ahead of the general election, a new survey has found.
The tech sector business activity index was at 55.7 at the end of the first quarter of 2015, down from 59.6 during the same period last year to sink to its second-lowest since mid-2013, figures from KPMG’s Tech Monitor UK have shown.
“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,” Tudor Aw, partner and head of technology sector at KPMG, said.
However, the survey indicated a slight increase (five per cent) in hiring plans over the year in the tech sector. It also found that tech sector employment has expanded by almost 15 per cent since 2010 – around three times the pace of the overall UK jobs market – with the UK tech sector directly accounting for one million jobs.
“The results continue the theme of a robust and thriving UK tech sector that outstrips the wider UK economy,” said Aw. “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.”
Almost eight times as many UK tech companies (55 per cent) anticipated a rise in business activity over the next 12 months compared to those forecasting a fall (seven per cent).
However, there is evidence that renewed risk aversion within domestic and external markets has held back near-term growth momentum ahead of the general election this week.