'Bullish' UK tech sector grows faster than the economy

KPMG report claims almost half of tech firms plan to boost headcount in coming 12 months

The UK technology market is "firing on all cylinders", according to KPMG, whose new report claims the sector is growing faster than the country's economy as a whole.

Between April and June this year, the expansion of business activity rose at its fastest pace since the onset of the financial crisis in 2007, according to KPMG's Tech Monitor UK survey, which it compiled with financial services firm Markit.

It added that 43 per cent of firms plan to hire more staff in the coming year while just 5.9 per cent plan to cut jobs over the same period.

Tudor Aw, KPMG's head of technology, said things are looking good for the UK technology market.

"The UK tech sector is firing on all cylinders, with sustained growth outstripping the wider economy," he said. "Importantly, this good news story looks like it will continue in the year ahead, with many tech companies planning to loosen the purse strings to hire staff and raise capital expenditure.

"For the first time since 2007, there is also a welcome upturn in Tech IPOs which hopefully signals the beginning of a comeback of tech companies to the London Stock Exchange, something that will be important in convincing tech startups that the UK is the right place to be."

Last week, the Office of National Statistics said the UK economy has returned to pre-recession levels. Markit's senior economist Tim Moore said the tech sector is also on the up.

"The latest survey provides a resoundingly bullish snapshot of UK tech sector performance in 2014 so far, with companies in the midst of their strongest overall growth phase for at least seven years," he said.

"Not only is the tech sector enjoying a longer and steeper growth upswing than the wider UK economy, but a broad spectrum of tech companies continue to report confidence in terms of job hiring and investment spending for the next 12 months."