IT/BPO demand uncertainty to continue in 2023, says J.P. Morgan
NEW YORK CITY, UNITED STATES — Investment banking firm J.P. Morgan is expecting the demand for Information Technology (IT) and Business Process Outsourcing (BPO) services will remain uncertain in 2023.
According to a recent report, J.P. Morgan said that the reset in demand trajectory highlighted in the second half of 2022 will continue until H1 2023 as companies delay new projects and prioritize cost-cutting and ROI-generating ventures.
However, the investment banker stated that the improving supply during this period would counterbalance the low IT-BPO demand.
Moreover, demand trends are projected to improve in H2 2023, driven by pent-up spending.
J.P. Morgan stated that IT/BPO stocks slipped 37% year-to-date (YTD), compared to a 15% decrease in the S&P 500 index.
As a result of these projections, the company cut its H1 growth estimates for most IT/BPO companies, bringing the forecast lower than the Wallstreet consensus for most names.
On the other hand, J.P. Morgan sees Wallstreet revenue estimates for 2023 as too high.
