The UK tech sector has outperformed the wider economy, and has seen a greater increase in jobs.
According to KPMG, during Q4 2014 UK tech sector business activity rebounded strongly from the growth slowdown experienced through Q3 2014.
The report revealed that the number of new tech start-ups is rising rapidly and looks to have reached a seven-year high in 2014, after falling sharply in the direct aftermath of the global financial crisis.
Start-up numbers are estimated to have risen by around 40 per cent year-on-year and hit a post-crisis peak in absolute terms in 2014.
It also found that although the UK average survival rate for start-ups has improved in recent years, tech start-ups have outperformed the national average with the sector survival rate at 82 per cent, comfortably above the UK-wide survival trend of 76 per cent.
Tudor Aw, head of technology sector at KPMG, said: “UK tech companies are currently benefiting from lower input prices and strong order books, resulting in the second fastest pace of profitability rises since 2007.
“Looking forward, the main risk to this is a potential tightening in labour market conditions that may lead to an increase in payroll costs.”
Staff hiring also picked up during the final quarter in 2014, from 54.5 per cent at the end of Q3 to 55 per cent.
Some tech firms revealed that rising R&D (research and development) spending had contributed to additional job hiring.
Aw added: “In a world where economies are facing ‘jobless recoveries’, it is fantastic to see the UK tech sector combine its increase in business activity with strong job creation.”
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