Business Services | Fourth Quarter 2023

January 2024 – This issue of SOLIConnect includes a discussion with a regard to a 10.2% increase in the Business Services Sector Index (“SBSS Index”) during Q4 2023, in line with the 11.2% increase experienced by the S&P 500 as optimism for declining interest rates in 2024 drove market valuations higher. However, performance within the SBSS Index varied significantly by sector. HR Services, which is dominated by payroll processors that benefit from rising interest rates, and Business Process Outsourcing, which is facing downward pressure in both demand and pricing from emerging AI applications, were both flat for the quarter. On the other hand, Marketing Services, which is driven by digital marketing but also benefitted from the end to the writers strike, was up 17.3%. Information Services (20.6%) and IT Consulting (12.8%) both outperformed the broader market as demand for IT services and supporting data continues to accelerate.

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January 19, 2024