Demand for IT services will not show a major rebound in the next 12 months as a result of the slow recovery projected for European economies, according to recent research from IT market research company IDC.

Though demand is likely to remain flat in 2010, say the company's analysts, 2.2 percent growth is anticipated for 2011. Overall, the Western European IT services market is expected to grow at a compound annual growth rate of 3.4 percent between 2010 and 2014.

In 2010, however, improving business sentiment won't result in a swift turnaround in fortunes for the IT services market. "IT budgets have stabilised, and in some cases show some growth, but strong price pressure will limit the market’s recovery capacity in the short term," say IDC analysts. A willingness among companies to offshore work will continue to drive project prices down, for example, while virtualisation will put pressure on the value of contracts and partly offset market growth throughout the forecast period.

In the short term, projects driven by cost concerns will remain a high priority. "We expect the ‘growth agenda’ to return slowly, bringing investments in business intelligence and industry-specific solutions, as well as the global rollout/integration of applications, when these solutions can support business growth, towards the end of the year,” said Laura Converso, research manager at IDC European Software and Services.

In geographic terms, the Nordics, Germany and the UK are predicted to outperform the European average throughout 2010. Growth in France is expected to be in line with the European average, while Benelux, Italy and Spain will continue to perform below the market average over 2010.