UK tech sector remains resilient

(3 minutes to read)

Despite technology firms’ optimism dropping to a 10-year low, 43% of tech firms said they expected to boost their workforces in the next 12 months.

Umbrella company contractors working in the tech sector will be pleased to learn that the industry has remained resilient.

The KPMG UK Tech Monitor Index, which measures the strength of business activity across the sector, rebounded to 54.4 in Q1, from 52.3 at the end of 2018 – the weakest pace of growth recorded in three years.

However, the sector, which includes technology software and services providers, and technology equipment manufacturers – also outperformed the overall UK economy in Q1 2019, which grew at the weakest pace (50.6) for over six years.

Tech firms attributed faster sales growth to resilient demand from the US and from diversification into new overseas markets. The new business index registered at 55.1 in Q1, up from 51.9 in the final quarter of last year.

Although the rate of employment growth remained among the weakest since 2013 in Q1, 43% of tech firms said they expected to boost their workforces in the next 12 months, while only 11% forecast a reduction.

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Bernard Brown, vice chair at KPMG UK, commented, “The latest Index ultimately outlines the resilience of the UK tech sector, and the strength of its ability to compete globally.

“It’s encouraging to see tech firms’ output and order books rebound from the low levels of growth seen at the end of 2018, as corporate demand for technology services and a healthy pipeline of new product launches supported sector growth in Q1.

“While business may be concerned about global economic headwinds threatening customer spending, confidence is being buoyed by long term trends where we have a track-record for innovation.

“Advances in AI-enabled enterprise software, innovation in fintech and a strong demand for cloud technologies are all excellent opportunities for the sector to grow in the year ahead.”

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