It’s clear to all that the Covid-19 outbreak has injured the economy across all sectors, but new figures from KPMG reveal the extent of the damage to UK tech sector.
The latest KPMG UK Tech Monitor Index shows the tech sector “suffered its worst performance since the global financial crisis” in Q1 2020, as businesses cut costs and non-essential spending saw a “swift decline”.
The sector registered an index score of 47.1 for the quarter, down from 50.1 in Q1 and well below the 50.0 no-change mark - the threshold between growth and decline.
However, some businesses still reported growth, generally related to goods and services needed for home working and business continuity.
In March, all sub-categories experienced a decline, with the exception of software services, which registered an upturn in business activity and hit an index score of 50.8.
Employment numbers were also up, which KPMG attributes to the fact businesses needed to quickly fill vacancies to deliver on existing projects.
Despite the slump, the tech industry expects to rebound and remains optimistic about the near future.
“With UK tech companies adding to their payrolls at the start of 2020, a recovery in staff hiring was the most positive development highlighted by them so far this year,” said Bernard Brown, Vice Chair at KPMG UK.
“Although tech business confidence fell in recent months, confidence remains stronger than most sectors of the UK economy, helped by pockets of growth within software & services amongst growing consumer demand for relevant digital solutions to cope in ‘the new normal’," he added.