Recent reports published over the summer 2014 show promising signs emanating from the TMT sector.

What?

Recent analysis of the IT sector have highlighted trends which mean TMT sector businesses can be increasingly confident in 2014.

Increased TMT M&A activity

According to the latest data from corporate finance firm Regent Partners, the number of European TMT M&A deals announced in July 2014 has reached a record of 329, with a total deal value of $30 billion.

Since September 2013 there has been a steady increase in M&A activity in the technology sector, with aqui-hire deals, large takeovers and IPOs becoming commonplace. After years of an industry-wide risk averse attitude, more and more companies are keen to grow earnings through acquisitions as confidence in the economy continues to grow.

Further demand for IT staff

Demand for IT staff continues to rise, with the ‘Report on Jobs’ carried out by KPMG and the Recruitment and Employment Confederation stating that the July 2014 index for permanent staff in the sector stands at 68.1, the highest it has been for three months and above the 67.6 average for all permanent jobs across the UK. The report has also indicated an increased need for temporary staff in the area, with this growth rate at a six-month high.

As a result IT budgets are expected to rise over the next three years. Heath Jackson, partner in the CIO Advisory practice at KPMG has noted that companies are now offering starting salaries in the sector at a rate that have risen to levels unseen during the survey’s 17 year lifetime.

UK manufacturers double outsourcing spend

Figures from Nelsonhall and BPO firm Arvato show that during the first half of 2014  UK manufacturers spent £130 million on outsourcing services, 132% more than in the first half of the previous year.

Companies which, particularly during the recession, carried out non-core functions in-house are now attempting to refocus their internal resources in order to allow expansion of their core business, another side effect of the increased confidence in the economy, with the telecoms and media, financial services and energy and utilities sectors accounting for 70% of the total spend on outsourcing deals.

So what?

With both TMT sector businesses and their customers reviewing activity within the sector as a barometer for making investment decisions, these recent reports are an encouraging indication that the sector is undergoing a stable recovery. As confidence grows and businesses see others successfully investing in upgrading their IT functionality, more businesses are likely to follow suit which will further enhance the development of the sector and present more opportunities to those individuals working within it.