Europe stormed ahead of the US last year in its dash to offshore more business activities, a report revealed yesterday

Europe stormed ahead of the US last year in its dash to offshore more business activities, a report revealed yesterday. The research, from adviser TPI, showed offshoring contracts rose to a record €58bn (£41bn) last year, with Britain accounting for 20% of the total, making it the second biggest offshorer after the US. Europe as a whole accounted for 49% of the total, overtaking the US for the first time, which stood at 44% of all projects. The Asia Pacific region accounted for 7%. In 2003, the US had a market share of 47%, Europe 41% and the UK 17%. The €28bn of outsourcing contracts awarded by European firms last year was up from €25bn in 2003 and double the level of 2002, TPI said. TPI says Europe's use of offshoring will continue this year. TPI's research showed 67% of the total last year was in the IT sector and 33% was in business processing, whereby firms engage third parties to perform functions such as finance and accounting, procurement, customer relationship management and human resources administration. Business processing expanded by 50% as a proportion of major contracts last year, from 22% in 2003. Of all offshoring, the biggest single chunk was in financial services, which accounted for a third of the total. Western firms are often used to provide advice and technical expertise when setting up centres overseas. The TPI figures found the share of this market going to the "big six" US firms, which include IBM, Hewlett-Packard and EDS, had fallen sharply last year because of the growth in European offshoring.