Although the global economic turmoil slowed down this year’s global outsourcing market, which includes both inshore and offshore services, the sector is still posting double-digit growth in “no-growth times.”

After posting a 19% growth rate last year, the global outsourcing market will end 2009 with total revenue of US$373 billion, 14.4% higher than the US$326 billion recorded in 2008, according to Wednesday’s forecast of ICT research and advisory firm XMG Global.

The Philippines will likely close the year with US$7.3 billion or 21.7% growth, lower than the 24% growth forecast due to the slackened pace of IT services and the delay of expansion plans of several captive players, XMG projected. Still, the country will register double-digit growth.

In addition, foreign direct investment is expected to slide this year as investors streamline their capital. Overall, the Philippines will post 6.9% of the total offshore revenue which is close to the 6.7% share last year.

Other top performers, like India and China, will remain at the head of the list. India will capture 44.8% of the total market and haul in US$48 billion revenues. China will take 25.9%, and haul in US$28 billion.

“The market share of India is similar to 2008 and has mostly to do with the Satyam accounting adjustments and the shifting of work to other offshore countries. In other words, we are seeing new levels of normalcy in which the recession has provided the opportunity to rationalize and shift work to other offshore destinations other than India,” according to XMG Global senior analyst
Vincent Altez.

Looking forward to 2010, the prediction cites factors that will affect both the market value and the dynamics of global sourcing.

In 2010, the economic recovery of the US and Europe will create a shift for BPO demand over IT services, application development and support being absorbed into BPO deals. Other offshoring countries - South Africa, Egypt and Mexico will also become more attractive to investors. However, the agility and commitment of the Chinese and Vietnamese governments will continue to draw foreign capital.

The build out advance infrastructures, improvements or a decline in a country’s productivity index, and the rising costs of mature offshore countries such as India will likewise contribute to the decisions of locators.

Outsourcing and off-shoring’s double digit growth in - no-growth times compels new economies to shift their views on these industries permanently. It proves that off-shoring and outsourcing is part of a natural ongoing economic revolution notwithstanding a financial crisis, XMG Global analysts concluded.