Employment trends in the tech sector are outstripping those seen across the rest of the UK private sector, a report has found.
According to the latest Tech Monitor UK report from analyst KPMG/Markit, UK tech sector companies are experiencing a positive trend in regards to future job hiring and business activity, with almost half of tech companies (49 per cent) expecting to employ additional staff over the next 12 months.
Meanwhile, the most recent PMI (Purchasing Managers’ Index) Employment Index has revealed that current job hiring by UK tech companies is close to its strongest for three years, and faster than the UK private sector average.
In addition, tech sector business activity growth during Q1 2014 was only slightly slower than the 10-year high reached at the end of 2013, attributed to steep rises in new work and the lowest rate of cost inflation for over four years.
The UK tech PMI index measured UK tech sector business activity as 60.0 in March, above the 50.0 no-change threshold.
By comparison, the 10-year high recorded at the end of 2013 was 60.9, indicating business activity growth in the tech sector outstripped that of the UK economy as a whole.
Commenting on the results, Tudor Aw, head of technology at KPMG, said: “Recent falls in share prices of technology stocks have led some to question the health of the tech sector but all the data in this report points to a UK tech sector that is in rude health, and increasingly optimistic in its outlook on business activity and recruitment plans.
“With the increase in IPO activity, I would like to see the strong performance of UK tech companies translate to a mainstream technology company floating in London to help boost the sector and cement the UK’s position on the map of global tech hotspots.”
KPMG added that “an improved domestic economic outlook, increased investment spending and buoyant client demand were all key factors behind the latest rise in tech sector business activity”.
The firm said that tech sector businesses also benefited from a combination of higher selling prices, weakening cost inflation and rising new business volumes during Q1 2014.
Tim Moore, senior economist at Markit, added: “UK tech companies clearly punch above their weight in terms of contribution to UK GDP growth.
“Strong figures from the tech sector add to a recent flurry of positive news on the UK economy, which has prompted substantial upward revisions to the 2014 growth outlook from institutions such as the IMF and office for budget responsibility.
“Tech companies stand to benefit from two key domestic economic tailwinds this year, which are rising business investment as confidence in the recovery takes hold and improving household spending power as wages finally start to climb more quickly than consumer prices.
“A buoyant mood among tech companies about future job hiring intentions bodes well for growth in the year ahead and is a further signal that the UK economy is set to continue its upward ascent over the course of 2014.”
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