Asia-Pac, Europe Outpace U.S. in Outsourcing Growth

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Midway through 2007, it appears the market for outsourcing is heating up in just about every corner of the world other than the U.S.


According to sourcing advisory firm TPI, the value of new large outsourcing contracts ($25 million-plus) in Asia-Pacific grew 100 percent in 2007's first half, compared to the same period in 2006.


This performance marks the third year of such growth in Asia-Pacific, says TPI India's managing director in a Moneycontrol report. The flurry of new contracts demonstrates a demand for outsourcing even stronger than in Europe, where the value of new outsourcing deals rose 78 percent in the first half of 2007.


Both regions are helping outsourcing providers compensate for what the MD says is "a very soft US market, where new outsourcing business is at its lowest level since 1994."


It may take some time, however, for providers to build enough business to help make up for the decline in U.S. deals. Several Indian firms, including Infosys Technologies and Wipro, suffered a tough first quarter because of it.


Asia-Pac was also the only region that saw growth in the BPO market in the first half of the year, with eight big BPO deals worth a total of $700 million signed during this period. This is in contrast to Europe and the U.S., where the MD says the market for BPO is "tepid and lumpy."