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UK tech sector manages to avoid economic slowdown

The UK tech sector has managed to shelter itself from an economic slowdown in the fourth quarter, according to new reports from KPMG and Markit.

It follows indecision over whether the tech sector would be able to continue five straight years of growth, especially with other sectors in the UK failing to grow in 2014.

The report from KPMG claims 53 per cent of businesses surveyed expect a rise in business over the next 12 months, and only 7 per cent expected a decline.

Hiring in the tech sector has grown in the fourth quarter, with a huge surge in programmers, engineers and other technology positions.

For investors, capital expenditure continues to grow in the UK tech sector, as more large companies acquire unique startups in the region. Talent acquisitions are becoming more prevalent even with global companies like Yahoo and Facebook.

Profitability in the tech sector is the second-highest since 2007, at 55.8 on a Tech Monitor UK survey index. Revenue continues to grow as more companies continue expansion outside of the UK in both software and service markets.

It is one of the best times for startups, with an 82 per cent survival rate compared to 76 per cent in other sectors. This is surprising considering a 40 per cent year-on-year startup growth in the tech sector.

"The survey results echo my personal view that the UK tech startup scene is vibrant and far outstripping other sectors," said Aw. "For those naysayers, it also shows they have a higher survival rate than the UK average for all startups.

The UK has one of the most prominent SaaS markets in the world, alongside other business services, but it is not known as a big producer of commercial programs like the U.S. or mobile games like Finland.

This large business-tech sector is generally quite profitable, due to large customer portfolio and lack of actual expenditure.

David has been a technology journalist for over six years, covering a wide range of sectors. He currently researches apps, app sectors and app markets for Business of Apps, and has written for ITProPortal, RTInsights, ReadWrite, and Digital Trends.