UK tech companies are growing at the fastest rate for a decade, adding staff and raising their budgets, according to research.
A “cyclical upswing” in economic activity, which first emerged in the spring of last year, has accelerated sharply since the autumn, with “strong inflows of new work driving the steepest expansion of business activity for almost a decade”, according to research by consultants KMPG and information services company Markit.
KMPG said that tech companies have been on a sustained staff hiring spree since the global economy started to emerge from recession in late 2009; Markit’s data showed that nearly half (44 per cent) of UK tech companies plan to raise their staffing levels over the next 12 months, with only seven per cent looking to cut staff, the most positive these companies have been since the survey started four years ago.
These hiring plans are accompanied by plans for increased investment spending: around twice as many firms (27 percent) forecast a rise in capex spending as those that anticipate a decline (13 percent).
Tim Moore, senior economist at Markit said improving economic conditions across developed markets and rising domestic business sentiment have helped propel the UK tech sector to its fastest growth performance for almost a decade, and added that UK tech companies seem “well positioned to benefit from any increase in corporate spending patterns over the course of 2014”.
Tech employment in London is certainly on the up – according to figures published by Tech City UK (the government’s cheerleader for tech companies in the capital), between 2009 and 2012 the number of tech and digital companies in the capital increased from 49,969 to 88,215.
Roughly a quarter of all job growth in London comes from the tech/digital sector, with approximately 582,000 people now employed by the sector in London.
A small but potentially fast growing part of this sector are the startups that make up the so-called Tech City movement in the north and east of the city (follow the link to see photos of the neighbourhood).
However, growth in demand for IT workers in London is also pushing up wages, and the government is looking at how it can create growth in high tech jobs around the country and not just in the capital.