The sector “enjoyed robust growth” in the last quarter of 2014, said KPMG, “avoiding the slowdown seen across the wider UK economy”.
The KPMG/Markit Tech Monitor UK survey shows that tech sector jobs growth “accelerated”, delivering “sustained profitability” that now stretches to five years. It also found the “widest performance gap” between the tech sector and the rest of the UK economy for almost six years.
The report also revealed that the number of new tech startups is rising rapidly and charts a seven-year high in 2014, after falling sharply in the direct aftermath of the global financial crisis. Startup numbers are estimated to have risen by around 40 percent year-on-year.
The report also found that although the UK average survival rate for startups has improved in recent years, tech startups have outperformed the national average with the sector survival rate at 82 percent, comfortably above the UK-wide survival trend of 76 percent.
Much of the overall tech sector improvements were down to new business gains, the success of new products and slower cost inflation. The index measuring tech sector profitability was the second-highest for any quarter since Q4 2007.
More than half of tech sector survey respondents (53 percent) expect a rise in business activity over the next 12 months, while only 7 percent forecast a reduction. Tech sector job hiring intentions and capex plans remain “upbeat” for the next 12 months, but are less positive than those reported in mid-2014.
Tudor Aw, partner and head of technology sector at KPMG, said: “This quarter’s report shows that the concerns highlighted in Q3 2014 about the sector entering into storm clouds have been misplaced. The previous survey showed that while tech sector business activity had been strong, the rate of expansion had slowed noticeably. Remarkably, the final quarter of 2014 marks a period of sustained job creation in the sector that now stretches to five years, something that should be celebrated loudly.”