Advisory giant firm predicts global market will grow by a tenth in 2008
The global market for outsourcing will grow by almost a tenth in 2008, according to TPI, the world's largest sourcing data and advisory firm.
The development will be driven by the tough economic climate as companies look to drive efficiency savings in the wake of the credit crunch.
In it latest quartley index, TPI noted that so far this year 122 contracts valued at over €16.5 billion had been placed, with annualised values up nearly 19 percent year on year, making it the second best first quarter ever. The company said that Europe, the Middle East and Africa (EMEA) represented about 70 percent of the total global value of outsourcing to date in 2008 – up from about 50 percent for the full year of 2007.
Partner and president for TPI EMEA Duncan Aitchison said that uncertainty relating to the sub-prime crisis had impacted on outsourcing: “After years of relative growth and prosperity for the financial services sector, in mid-year 2007, the sub-prime bubble burst. The banking sector, largely unsure of the extent and depth of the impact, froze decision-making as it tried to quantify the scale of the problem. The outsourcing debate went on hold for a few months.
"Outsourcing is back on the agenda, Logic dictates that we should therefore see this manifest itself as increased market activity as the year unfolds."
Commenting on growth in the EMEA region, he added: "The demand for outsourcing in EMEA reflects the relative immaturity and under-penetration of outsourcing in this region when compared with the United States. There remain significant emerging, and largely untapped, market opportunities within the EMEA region, which should sustain healthy demand levels for the foreseeable future."