The Western European IT services market is set to grow by almost five per cent over the next five years, it has been revealed.

Research carried out by industry analyst IDC indicates the sector will reach $249 billion by 2012, driven by higher demand for outsourcing combined with the increasing externalisation of custom application developments.

Laura Converso, research manager of IDC European software and services said the outsourcing segment continues to be the growth engine of the IT services market despite the economic downturn.

"The growth we expect in the application development market and the estimated higher growth in the IS outsourcing market more than offset the downward effect of the crisis," she added.

Earlier this week, information gathered by advisory firm TPI suggested the number of global firms choosing to outsource their services has increased during the first six months of this year, with 28 billion of deals being signed for outsourcing contracts.