Europe overtakes US in outsourcing

January 27th, 2009

Latest research finds Eurozone ahead of US in contract volume. Plus, 2008 was a record year despite recession onset.

European companies signed more new outsourcing contracts, with a greater combined value, than those in the US for the first time in 2008, according to a new report from outsourcing analysts TPI.

Private sector companies in the Eurozone signed 271 outsourcing contracts in 2008, compared with 243 in the US, the TPI Index found.

This effect is the fruition of a long developing trend in the outsourcing industry, said TPI’s European head Duncan Aitchison, not merely the onset of recession in the US.

“Business in European countries such as Germany has been developing gradually over the last two to three years,” he explained.

Although the combined global value of outsourcing contracts signed in 2008 (€72 billion) outstripped the previous year, the Index also found a dip in business during the second half. Contracts worth €31.3 billion were signed in the latter two quarters of the financial year, down 20% from the first two.

Aitchison argues that this dip reflects hesitation on the part of potential buyers, rather that a downward trend in the business as a whole.

“Companies need clarity for the future when making long-term decisions. At the moment, the clarity is scant, so long-term, strategic contracts are down,” he explains.

He added that this uncertainty was likely to continue in the first half of 2009. “But the market for smaller, more tactical contracts still has pace,” said Aitchison.

Source: www.sourcingmag.com

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