European outsourcing market remains slow despite sharp rise in restructuring activity.

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TPI, the sourcing data and advisory firm in the world and a unit of Information Services Group, Inc., an information-based services company, have released data showing that the commercial outsourcing market in Europe, the Middle East and Africa (EMEA) continues its lacklustre performance despite a surge in the amount of restructuring activity.

The 3Q EMEA TPI Index, which measures commercial outsourcing contracts valued at [euro]20 million or more, showed that 57 contracts were awarded in EMEA in the third quarter, valued at just over [euro]5B in TVC, a decline of eight percent quarter on quarter and 10 percent year on year. Globally, TVC fell by more than 20 percent both quarter on quarter and year on year to [euro]11.3B.

In EMEA, the historically smaller Nordics and Netherlands markets provided pockets of strength as a result of a number of large scale restructurings signed in the first nine months of the year. The U.K. and Germany continue to show a decline in outsourcing awards, having only awarded half of the TCV year to date compared to the same period in 2009. However, Germany is expected to see a substantial increase in outsourcing activity by the end of the year.

Restructuring activity resumed the fast pace set at the beginning of 2010. In the third quarter the number of restructuring contracts increased by 80 percent quarter on quarter and almost 500 percent year on year. Meanwhile, new scope in EMEA is down by 45 percent quarter on quarter and 57 percent year on year. Globally, new scope TVC is down 20 percent making it the lowest result in more man a decade.

Duncan Aitchison, President and Partner of TPI EMEA, said: "We anticipate continued restructuring activity in the Region in the coming months as a natural force in a maturing market. Noting the number of contracts up for renewal, we expect 2011 to once again experience significant restructuring activity, although probably not as high as 2010. The prospect for large scale new scope awards in EMEA, however, is both far less predictable and more influenced by the continuing uncertainties in the global & regional economic outlook."

By scope, EMEA ITO TCV saw its third consecutive quarter of declining values with just over...

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