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
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.
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."
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