UK outsourcing plunges in first quarter of 2013

2013 got off to a slow start for the UK IT and business process outsourcing sector, with a 30% drop in total contract value in the first three months of 2013 as the number of new contracts fell and renegotiations dominated activity.

The total value of contracts worth over $5.2m signed in the UK during the quarter was $762m. The EMEA region as a whole recorded a total contract value of $1.9bn, 20% less than the same period last year. This compared with $3bn in the first quarter of 2010, $2.7bn in 2011 and $2.4bn last year. IT outsourcing accounted for $1.4bn of the total and business process outsourcing (BPO) $500m. There were 105 contracts awarded in EMEA, 15% less than the same period in 2012 and 17% lower than the previous quarter. One of the reasons for the disappointing sales was the fact that the proportion of contracts that were renegotiations rose to about 50%, with new contracts down significantly.

Globally the total value of contracts was $3.9bn in the first quarter of 2013, compared to $5.4bn 12 months earlier.

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