The growth of outsourcing is shoring up the western European IT services market in difficult economic waters, an IDC report has asserted.

The credit crunch will lead to reduced growth in project services, but will have little or no impact on the outsourcing segment, according to the research house. This will lead outsourcing to overtake project services as the largest IT service sub-sector this year.

IDC’s study reveals that the total IT services market exceeded expectations in 2007, showing 6.4 per cent growth, and was worth $192.3bn (£96.7bn). Market growth is expected to slow to 4.6 per cent this year and will stay at a similar rate for the next few years, swelling the market to $242.8bn (£123bn) by 2012.

Laura Converso, research manager for IDC’s European Services Research, said: “As the European economy cools down, the outsourcing segment continues to be the growth engine.”

IDC claimed growth in the UK market will be slightly below the western European average. It estimates that project-based services in the UK will show modest growth of 2.9 per cent this year and will be worth £10.2bn.

Big public sector projects kept the market buoyant in 2007, but IDC warned that reduced spending on public sector IT will slow growth rates over the next few years.

According to IDC the outsourcing market in the UK has reached a high level of maturity and will consequently grow less rapidly than in other parts of the continent.

However, Julian Laister, marketing director of managed service provider Nscglobal, said: “There is a willingness and acceptance of the use of external parties.

“Companies are consolidating their infrastructure and have to get more from their budget,” he said.