General Election Stalls UK Tech Sector Growth

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Worries over European market also affect growth, but UK tech sector still sees boost in profits

The UK’s technology sector witnessed a slowdown of growth in the second quarter of 2015 because of the General Election and euro area worries, according to a report from KPMG’s Tech Monitor UK survey.

Q2 2015 saw the weakest pace of expansion since the first quarter of 2013, with uncertainty “at home and abroad” impacting growth and crimping sales volumes and new business wins.

Profits

However, despite the slowdown in growth, the UK tech sector still experiences a growth in profits during the quarter.

tech“The latest Tech Monitor report can be summarised effectively as a ‘game of two halves’,” said Tudor Aw, partner and head of technology sector at KPMG.

“The second quarter of 2015 showed yet another quarter of solid growth but the overall momentum weakened from peaks seen in 2014. This reflected the impact of a number of uncertainties, most notably the General Election and euro area uncertainties.”

KPMG predicts strong projections for activity, job creation and capex during the next 12 months though. In terms of business activity, just over half of the respondents expect an increase over the year ahead and only six percent forecast a decline.

As for job creation, almost half of the respondents anticipate a rise in payroll numbers over the year ahead, indicating the strongest employment projections across the UK tech sector since this index began in October 2009, said KPMG.

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