The Everest Group published its second Market Vista report for the 2012 fiscal year, which reports the state of global outsourcing based on public data that the consultancy collects. The Q2 installment reveals a slow-down in this space – only 411active outsourcing deals remain this quarter compared to 441in Q1 and 516 in the same quarter a year ago.

The firm says that among these, 54 deals had a total contract value of over $50 million, including two “mega deals” with a TCV of $1 billion.  Annual contract value fell to $2.2 billion, less than the $2.6 Everest reported 12 months ago: this breaks down to a 19 percent  decline in business process outsourcing, and 3 percent less IT outsourcing.

“A sluggish global economy and the relatively conservative approach of buyers continue to have an impact on the global services market,” said Eric Simonson, managing partner of Research. “Buyers are taking advantage of increased provider competition in a tough market by negotiating shorter contract commitments at competitive prices.”

The public sector accounted for one quarter of all of the outsourcing transactions, while financial services accounted for one fifth.  And the manufacturing, distribution and retail vertical had a market share of 17 percent. The latter segment has seen a 44 percent drop in annual contract value, and a 3 percent increase in transaction volume.

The Everest Group reports a few other global statics as well. While transaction volumes declined in North America and Western Europe other regions including Australia, Brazil and India are accelerating, and Asia is becoming an even bigger destination for call centers and other remote sites.

A number of reasons are cited for the decline in outsourcing. The debt crisis in Europe is one factor, coupled by the focus on job creation and offshoring in particular during this election year.