UK tech sector growth weak thanks to Brexit uncertainty

KPMG's report revealed that tech companies are still looking to grow their staffing over the next few years

Brexit

The UK's tech sector has experienced the slowest rate of growth in three years according to KPMG, thanks to uncertainties surrounding Brexit and the consequences it will have.

The company's latest UK Tech Monitor report indicated very limited growth in the sector in the last quarter of 2018 - its lowest rate of growth since 2015.

KPMG's index measured growth at a level of 52.4 for the end of last year. If it had been 50, it would have indicated no change at all compared to the previous year. However, in the third quarter of 2018, it measured 54, reflecting a pretty substantial drop.

At the same time, the cost of running tech businesses increased, making it a disappointing year for UK-based firms.

Advertisement
Advertisement - Article continues below
Advertisement - Article continues below

Unsurprisingly, one of the biggest concerns companies had over the last 12 months was how Brexit was going to affect their profitability. As a result of this uncertainty, some businesses even cut back on their spending, slashing investment in key areas.

However, this is set to change slightly in 2019 as more businesses look to invest in staff and new opportunities. Less than 10% of respondents questioned in KPMG's report said they expect their employee numbers to fall.

"Our survey reveals that political uncertainty has dented client confidence contributing to a slowdown in growth at the end of last year," said Bernard Brown, vice chair at KPMG.

"But, buoyant staff hiring and capital expenditure plans are still in place for 2019. This confidence is reflected in the statistic that almost 50% of UK tech firms intend to add jobs over the next year, whilst many traditional manufacturers are considering moving jobs offshore."

Featured Resources

How inkjet can transform your business

Get more out of your business by investing in the right printing technology

Download now

Journey to a modern workplace with Office 365: which tools and when?

A guide to how Office 365 builds a modern workplace

Download now

Modernise and transform your sales organisation

Learn how a modernised sales process can drive your business

Download now

Your guide to managing cloud transformation risk

Realise the benefits. Mitigate the risks

Download now
Advertisement

Most Popular

Visit/mobile/28299/how-to-use-chromecast-without-wi-fi
Mobile

How to use Chromecast without Wi-Fi

5 Feb 2020
Visit/technology/artificial-intelligence-ai/354796/ai-identifies-11-earth-bound-asteroids
artificial intelligence (AI)

AI identifies 11 earth-bound asteroids

18 Feb 2020
Visit/operating-systems/27717/how-to-fix-a-stuck-windows-10-update
operating systems

How to fix a stuck Windows 10 update

12 Feb 2020
Visit/business/business-operations/354790/hp-shareholders-invited-to-come-dine-with-xerox
Business operations

HP shareholders invited to come dine with Xerox

17 Feb 2020