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Tech sector output grows at its fastest level for 10 years: study

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Output from the tech sector is growing at its fastest for 10 years, according to new figures. Companies are hiring and investing, news that implies a boost for the ecommerce and multichannel industries.

KPMG’s Tech Monitor UK, a new quarterly report, brings together tech sector analysis. It found that in December the index measuring UK tech sector employment stood above the neutral 50.0 value at 53.9, while the latest Markit Global Business Outlook Survey, of October 2013, showed 43.9% of UK tech companies planned to raise staffing levels over the coming year, while the index measuring business activity in the sector stood above 50.0 for the 16th month in a row, at 61.0.

The report also found that UK technology firms are seeing profits grow at their fastest rate for six years, as the index measuring sector firms’ profitability rose to 55.3 in December, its highest level in that period. Some 44% of firms planning to hire more staff over the coming year, while 7% expect to see a fall in numbers. Some 27% plan to boost capital expenditure in the coming year, while 13% plan to reduce it.

“These figures prove once more that the UK tech sector is going from strength to strength,” said Tudor Aw, head of technology at KPMG . “The last quarter of 2013 saw the sector’s best growth performance in almost a decade, with a sharp increase in business activity, a rise in new orders and an increase in profitability despite higher costs. More importantly the sector showed again solid rates of job creation, well above the rates in other sectors of the economy.”

Tim Moore, senior economist at Markit, said: “Improving economic conditions across developed markets and rising domestic business sentiment have helped propel the UK tech sector to its fastest growth performance for almost a decade.”

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