SANTA CLARA, Calif., May 21, 2014 (GLOBE NEWSWIRE) -- Technology industry leaders are most bullish on revenue growth in the U.S., China, and the United Kingdom, according to the results of the annual Technology Business Outlook survey of U.S.-based technology executives conducted by KPMG LLP, the U.S. audit, tax and advisory firm.
The U.K. ranking is one of the biggest surprises in this year's survey with 42 percent of the technology leaders projecting that market as their first, second or third highest revenue growth rate for their companies in the next 12 to 24 months, compared to only 18 percent in last year's survey. The U.S. remains the number one market, selected among the top three by 81 percent of the respondents – higher than results in the prior three annual surveys – followed by China at 47 percent. The executives were each asked to select their top three markets.
"The high expectation for the U.S. market speaks to technology executives' belief in the growing demand for cloud, mobile and D&A technologies that are enabling new business models and increasing operational efficiencies," says Gary Matuszak, Global Chair, KPMG Technology, Media and Telecommunications practice.
"The jump by the U.K. is the result of strong economic recovery in the country combined with the effects of tax incentives which have encouraged investment in the tech sector," says Tudor Aw, Head of KPMG Technology Europe. "The findings reflect KPMG's most recent local UK technology report showing UK tech sector business activity growth at its highest for almost 10 years supported by steep rises in incoming new work and the lowest rate of cost inflation for over four years."
Pullback in Expectations for Brazil, Mexico, and South Korea
Unlike a year ago when Brazil, Mexico, and South Korea appeared on the rise, fewer survey respondents see these three countries as their biggest revenue and employment growth markets.
Brazil's position as a revenue growth market declined 10 percentage points to 23 percent and as an employment growth market 5 percentage points to 21 percent. Tech executives' expectations for their company's revenue growth in South Korea declined from 14 percent in 2013 to 7 percent in this year's survey, and for employment growth it slipped two percentage points to 10 percent. The outlook for Mexico dipped six percentage points to 9 percent for revenue growth, and fell six percentage points to 15 percent for employment growth.
"In Brazil, while there remains room for tech sector growth, macroeconomic trends, such as higher interest rates, are impacting growth," says Matuszak. "Despite South Korea's competitive technology sector, a maturing smart phone market is contributing to slower tech sector growth in that country, yet their employment outlook is more positive than revenue since South Korea relies on outside markets."
Technology executives believe the U.S., India, and China will be the leading markets for tech employment growth between now and 2016. Other countries with higher tech company expectations for employment growth are Canada, at 30 percent up from 23 percent, the U.K. 28 percent up from 21 percent, and Germany 15 percent up from 7 percent.
California top choice for U.S. investment
Looking at where tech companies plan to increase investment and jobs in the U.S. over the next two years, California led the list (28 percent), followed by Texas at 17 percent and the Southeast at 14 percent and the Midwest at 10 percent. Additional locations included Washington D.C. (9 percent), Other West (9 percent), New York (8 percent), Massachusetts (7 percent) and Other Southwest (7 percent).
Tech manufacturing: offshoring outgaining onshoring
While the majority (58 percent) do not plan to make any changes in how they deploy their manufacturing in the next two years, 24 percent are either moving more manufacturing offshore or incrementally adding new offshore manufacturing. Eleven percent are either moving manufacturing back or adding new manufacturing operations in the U.S.
At the same time, 61 percent of the technology executives say their companies are not planning to re-shore non-manufacturing functions. Sixteen percent say they will, and 23 percent say maybe.
Cloud, Mobile exceeding forecasts; leap in D&A, security expectations
To learn tech execs views on Cloud and Mobile revenue and expectations for data and analytics and security revenue, please see today's separate KPMG news release.
KPMG Technology Industry Business Outlook Survey
The KPMG survey was conducted in the U.S. in March 2014 and reflects the responses of 100 primarily C-level and senior executives in the technology industry. Of the 100 respondents, whose companies may be based in the U.S. or other countries, 74 percent represent companies with revenues of $1 billion or more and 26 percent represent companies with revenues in the $100 million to less than $1 billion range.
About KPMG LLP
KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the U.S. member firm of KPMG International Cooperative ("KPMG International"). KPMG International's member firms have 155,000 professionals, including more than 8,600 partners, in 155 countries.
CONTACT: Mike Alva KPMG LLP (415) 963-5426 firstname.lastname@example.org Twitter: @michaelalvaSource:KPMG LLP