U.S. Outsourcing contracts are declining vs. Europe
posted by Christopher in Outsourcing |
U.S. Outsourcing went down by 16% since 2006
- Europe Outsourcing Market increase 24%
- Reason of smaller, shorter and more focused deals as well as decline in the level of re-tendering activity in the U.S. market
US outsourcing operators are suffering from a “dramatic shift” in the global market as customers ditch America for Europe and Asia-Pacific, new research warns.
The latest Quarterly Index from sourcing advisers TPI shows that U.S.’s Outsourcing Contracts have declined by 16% when compared to the same period in year 2006. Indeed, the total contract value of deals worth more than $50 million awarded in the past 9 months have reached about $48 billion, which is 17% less than the comparable period in 2006. The contracts valued also decreased by 18% at $50 million or greater over the same time last year. And ‘new scope’ transactions were down roughly 43% in the Americas in comparison to the same time last year.By Contrast, the Europe’s Outsourcing Market has grown by 24% since last year 2006 in terms of the total value of all contracts let in. Europe is now the regional market, commanding its greatest ever share at almost 56%, worth more than €21 billion of the total value for major contracts. This shrinking of U.S. Outsourcing is the result of the following two converging market trends in the Americas:
“Contract awards worldwide have got off to a much slower start this year than traditionally seen in the first quarter, portending a softer outsourcing market for all of 2007, and continuing the slowdown of the global outsourcing market which first became apparent in the second half of last year,” said Duncan Aitchison, Managing Director of TPI
“While the decline in the total value of deals is in part due to shorter and therefore lower value contracts, this is not exclusively the case. The US’ current reluctance to outsource is also a contributory factor.”
