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Slow growth ahead for IT outsourcing | CIO

While the IT and business process services industry continued to grow through 2016, that growth slowed over the course of the year and could fall to less than 2 percent by 2019, according to a recent report from IT and business sourcing consultancy and research firm Everest Group.

[ Related: Outsourcing trends to watch in 2017 ]

The pace of year-on-year revenue growth fell from 4.5 percent in the first quarter of last year to below three percent by year-end. And Everest Group predicts a continued decline over the next one to three years, falling to as low as 1.9 percent by late 2019 as a result of as a result of macro uncertainties, technology disruption and intense competition.

The biggest question marks are the ultimate impact of Brexit and possible protectionist actions by the Trump administration in the U.S. UK buyers’ outsourcing transactions neared three year lows last year as they took a “wait and see” approach, and U.S. buyers might also delay deals until there is more clarity around potential changes to visa programs and the political climate around offshoring. “We expect a slowdown in decision making until there is more clarity on policies and the associated impact,” says Everest Group partner H. Karthik.

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