European companies signed more than a third of all outsourcing deals during the first quarter of 2008.
EU business accounted for 36 percent of all contracts signed, according to Everest Research, with most contracts for the outsourcing of IT and business processes.
The Market Vista report showed that the credit crunch and recession were not having a significant impact on the offshoring industry.
Financial services dominated the offshoring market, accounting for more than 14 percent of transactions.
About 12 suppliers expanded their operations, with offshore activity concentrated in India, the Philippines, Czech Republic and Romania, and potential destinations emerging in Thailand, El Salvador, Paraguay, Uruguay, Honduras and the Dominican Republic.
Global businesses have set up more than 20 captive units worldwide, while organisations such as AOL, Shell and Unilever have announced plans to dispose of their offshore captives.