Global outsourcing market saw a seven per cent drop in transaction volumes in the first quarter of 2009 against the preceding quarter, according to Everest Research Institute. The global annual contract value (ACV) dropped 16 per cent to $2.97 billion during the period.

According to the latest ‘Market Vista: Q1 2009 report’ on global outsourcing and offshoring activity tracked by Everest, the transaction volumes in the BPO space fell 15 per cent.

“Revenues of offshore-centric suppliers registered a 2.3 per cent decline, while those of traditional global suppliers declined by 2.2 per cent,” Mr Nikhil Rajpal, Principal, Everest Group, said.

The North American outsourcing market witnessed a 15 per cent decrease in transaction volume during the quarter. Although Europe witnessed a reduction in transaction volumes, its ACV was higher than quarter ended December, primarily pushed up by some large deals.

Mr H. Karthik, Research Director, Everest Research Institute, said that while other industries inked lesser number of outsourcing deals in the first-quarter, the banking and financial services (BSFI) sector actually picked-up momentum to register a 30 per cent growth in transactions, fuelled especially by increased activity in Europe.

Everest said that captive-related activities (establishment of new captive centres) included 20 new announcements in the first-quarter, compared to 22 in each of the previous two quarters. Asia continued to dominate offshore delivery.

“We expect the overall market activity to start picking up by the fourth quarter of this year,” Mr Rajpal pointed out.