KPMG Survey: Tech Execs Expect More Moderate Growth in Sector Employment, Revenue, R&D and Capital Spending

The technology sector appears to be moving to a moderate growth phase for employment, revenue and spending in the next year, according to the results of the annual Technology Industry Business Outlook survey by KPMG LLP, the audit, tax, and advisory firm. At the same time, the U.S. continues to be the leading geographic market for employment, revenue and R&D growth over the next two years, ahead of China and India.

While more (57 percent) of the technology executives surveyed expect their companies’ headcount to increase a year from now, compared to the 2011 survey (49 percent), the executives believe that most of the growth will be at a moderate rate. When asked the size of the increase, 42 percent said one to six percent, up from 28 percent in last year’s survey. Only 15 percent anticipated a growth rate of seven percent or more, down from 21 percent last year.

The technology executives hold a similar outlook for revenue. Though more than three-fourths expect their companies’ revenue to increase over the next year, only 10 percent expect significantly higher revenue a year from now compared to 17 percent in the 2011 survey. Another 67 percent of the technology executives said their companies’ revenue will be moderately higher, up from 60 percent in last year’s survey. The group of respondents anticipating revenue to be unchanged a year from now, 20 percent, was about the same as in 2011 (21 percent). Cloud, mobile applications and the consumerization of IT are expected to be the biggest revenue growth drivers in the next one to three years.

In looking at capital spending as a whole, just 27 percent of the tech executives today anticipate a six percent or more increase in capital spending over the next year compared to 31 percent a year ago. Another 27 percent see a one to five percent increase, up from 22 percent in 2011.

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