US state and local government organizations will dramatically slow their spending on outsourcing services next year.
The market experienced a huge increase of 50% in 2002 to 2003, but diminishing tax bases and changes in political leadership are expected to slow growth right down to 11% in 2004. Also, many major outsourcing contracts awarded in 2003 were pulled forward from 2004 in advance of the election year.
The government sector has been the most stable of revenue streams for many of the largest IT services providers in the US in the last two years, in contrast to depressed spending from commercial sector clients.
This article was based on material originally published by ComputerWire.