The tech sector in the UK rounded out 2020 with an impressive fourth quarter, outperforming the entire private sector, a new index from IHS Markit and KPMG suggests.
According to the index, in which a score of 50 and above represents growth, tech output came in at 51.6 in the final three months of 2020, with the wider economy hitting 50.5
“The final quarter of 2020, saw the UK tech sector demonstrate such resilience in the face of ongoing pandemic disruptions and some client spending delays ahead of the Brexit transition deadline,” said Bernard Brown, Vice Chair at KPMG UK.
The results do not come as too much of a surprise, however, given the effects of the pandemic on the wider economy and the importance of technology in facilitating business continuity.
As per a City A.M. report, employment also rose from a score of 48.2 in the third quarter to 51.6 percent in the fourth. This is the first time since lockdown was introduced in March 2020 that the workforce has increased in size.
KPMG claims the tech sector is gaining in confidence and is about to reach a four-and-a-half year high in terms of growth. This will depend on multiple variables, however, including an overall brighter economic outlook, as well as more corporate spending.
“While there has been little to celebrate over the last year, it will be a relief for businesses and employees in the tech industry to have ended 2020 with an optimistic tone,” said Ian West, Head of TMT at KPMG UK.
“Expectations of global and national roll-outs of vaccines and consequent relaxing of virus-related restrictions contributed largely to the positive outlook for 2021. It is particularly heartening to be able to speak of job creation at a period of such lingering ongoing uncertainty, for an industry which is so vital to the future innovation of the UK economy.”