UK tech enterprises report that new business volumes rose at the slowest rate since mid-2013 as the election causes the market to hold back until the results are announced. The KPMG/Markit Tech Monitor UK survey show a slow down at the end of the first quarter of 2015, as businesses slow down to wait for the election results before restarting growth in May.
According to the survey the tech sector UK Business Activity Index was at 55.7, which dropped from 59.6 in Q4 2014 to its second-lowest since mid-2013. The latest figure was also well below the survey-record high seen in Q1 2014 (60.5).
The report, which tracks the performance, confidence and employment outlook of UK technology businesses, illustrated a rosier picture for tech sector hiring plans with over two-fifths of the survey panel anticipating an increase in hiring over the year. It also 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 and is estimated that the UK tech sector now directly accounts for at least one million jobs.
The Tech Monitor UK survey respondents remained positive about growth over the coming year. Almost eight times as many UK tech companies (55%) anticipate a rise business activity in over the next 12 months as those that forecast a fall (7%). However, there is evidence that renewed risk aversion within domestic and external markets has held back near-term growth momentum. It found that tech firms have been much more able to look through the short-term volatility, with long-term expansion plans and positive capex feeding through to the fastest increase in UK tech sector staff hiring since the survey began in 2003.
Adding to the resilient UK tech sector picture, positivity persisted in terms of capex plans at the start of 2015, with around twice as many of the survey panel (29%) forecasting a rise as those expecting a fall (14%).
Commenting on the report, Tudor Aw, partner and head of technology sector at KPMG, said: “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.”