IT outsourcing locations are likely to change due to the slowing US economy, according to research firm Gartner.

The organisation claims that companies will decide the best way to cut costs is to outsource IT to foreign countries where labour costs are cheaper, reports Reuters.

Research director at the firm Singh said that this trend will most likely benefit the outsourcing market in India, according to the news provider.

"Factors that will give India the edge over other offshore locations are scale and quality of labour. India is central to almost any discussion of offshore services delivery for these buyers," he said.

Senior research analyst Arup Roy added that businesses are being cautious at the moment, but are considering options for containing labour costs.

"IT budgets have not yet been cut," he remarked.

Earlier this week, Consultant News published TPI Index figures indicating that the global outsourcing industry is gathering positive momentum into 2008.

The first quarter of 2008 saw a year-over-year increase of nearly 20 per cent in annualised contract value compared with 2007, according to the news provider.


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