(Source: PRNewswire)HOUSTON, July 21 /PRNewswire/ -- TPI, the largest sourcing data and advisory firm in the world and a unit of Information Services Group Inc. (ISG) , a leader in the information-based services industry, today released second-quarter and first-half global market data showing that outsourcing activity continues to be constrained by difficult macroeconomic conditions, despite its potential to soften the impact of the recession through cost savings and efficiency gains.

The TPI Index, which measures commercial outsourcing contracts valued at $25 million or more, found that the total number of contract awards fell 7.5 percent from the first quarter to the second quarter, to 135. While total contract value (TCV) rose about 5 percent sequentially to $20.5 billion, Annualized Contract Value (ACV) - TCV divided by the duration of the contracts - fell 5 percent from the previous quarter to $3.6 billion.

Compared with the first six months of 2008, which saw record levels of sourcing activity, the market in the first half of 2009 awarded 11 percent fewer contracts with 22 percent lower TCV and 28 percent lower ACV. Driving the declines were a reduction in mega-deals in Europe as well as lower spending globally on business process outsourcing (BPO).

On the bright side, demand for IT outsourcing (ITO) remained stable both sequentially and year-over-year in the Americas and Asia Pacific. In addition, several industry verticals, including Diversified Financials, Transportation, Retail and Telecom, increased their adoption of outsourcing during the first half of 2009.

"The first half of 2008 was extremely strong for the outsourcing industry, which makes year-over-year comparisons tough," said Mark Mayo, Partner and President, TPI Global Resources Management. "In addition, over the past six months, companies have been more tentative and tactical about making sourcing decisions as they try to navigate these challenging economic times. Nonetheless, recently we have seen some very early signs of stabilization in ITO markets, especially in the United States, which gives us some encouragement that we may be seeing a bottom to the current slump."

The TPI Index provides a quarterly snapshot of the global sourcing industry for clients, service providers, analysts and the media. Now in its 27th consecutive quarter, the TPI Index is the authoritative source for marketplace intelligence related to outsourcing transaction structures and terms, industry adoption, geographic prevalence and service provider metrics.

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Second-quarter results indicate that the outsourcing market has entered into a period of sustained activity, albeit at a significantly lower level than just a year ago.