Technology spending on the up, KPMG claims

Market watcher surveys Intellect members which are buoyant over future business

Public sector spending plans and government policies are set to have a major impact on future growth in the IT sector, according to a new survey.

Called IT Watch: A View To The Future, the survey was conducted among members of IT trade body Intellect, by KPMG, and found that 63 per cent felt more confident about the general business outlook than they did six months ago.

John Higgins, Intellect’s director general, said: "This feeling of optimism is supported by the fact that for most companies, sales volumes and values appear to have risen in tandem, with the majority reporting an increase or stable results over the past six months. At the same time, export sales are holding up and profitability is rising or remaining constant for most of our respondents.”

The research found Intellect members upbeat about the domestic market, particularly the public sector, with a clear majority expecting UK demand for their products and services to fuel further growth in the next six months.

Crispin O’Brien, head of technology for KPMG in the UK, added: “The implementation of the Defence Industrial Strategy and the Transformational Government Strategy will drive demand within the IT sector. The convergence of telecoms, broadband and broadcast will also create new opportunities for these industries.”

Looking ahead, companies were bullish about the outlook for the next six months, with the majority forecasting increases in sales volumes and values as well as profitability.

Higgins concluded: “The overwhelming feeling from these companies is that better times are ahead of us and that the market is steady but challenging. There are barriers such as increased regulation, which could constrain growth by taking up increasing amounts of management time, but on the whole our first survey found the sector to be in good shape.”