UK consulting market to flatline as shoppers lower spending, research finds

Keep knowledgeable with free updatesSimply signal as much as the Administration consulting myFT Digest — delivered on to your inbox.The UK consulting market will fail to develop this 12 months for the primary time since 2020 as fears over the resilience of the financial system, an upcoming election and geopolitical tensions immediate companies to spend much less on company recommendation.The retail, telecoms and pharmaceutical and manufacturing sectors are all anticipated to chop spending on consultancies, placing stress on an nearly £16bn market that boomed within the two years after the pandemic as administration groups turned to exterior advisers to navigate the disaster.The forecast is from an annual report on the consulting market by Supply World Analysis, which incorporates enter from the Huge 4 of Deloitte, EY, KPMG and PwC and is taken into account a benchmark for the business.A mix of upper inflation and geopolitical uncertainty had already hit the market final 12 months, with its topline development slowing to 4.7 per cent from 15.6 per cent in 2022, in response to the report. Companies, it stated, confronted a “polycrisis” final 12 months.“This created big ranges of trepidation for shoppers, leading to hesitancy when trying to put new consulting contracts out to tender,” the report discovered. Whereas UK inflation was 4 per cent in January, effectively beneath the greater than four-decade excessive of 11.1 per cent hit in October 2022, it won’t be sufficient to encourage firms to put in writing greater cheques for strategic recommendation, Supply World predicts. “With shoppers persevering with to undertake a wait-and-see strategy to grasp the place to behave if the financial system begins to recuperate, we anticipate comparable ranges of hesitancy in 2024, significantly with the upcoming basic election complicating public sector spending,” the report states.The downbeat forecast underscores the challenges going through the Huge 4 corporations that dominate the market. They’ve in latest months lower a whole lot of jobs and, in some instances, frozen pay. Except for 2020 when the consulting market shrank because the financial system was hit by repeated lockdowns, Supply World expects this 12 months to be its worst because it began monitoring the market in 2014. “We anticipate development to sluggish throughout all sectors this 12 months — and in some instances, dramatically so,” stated James Beeby, analysis lead at Supply World.“The market is subsequently set to turn into each tighter and extra aggressive, and this may make it much more essential that consulting corporations exhibit the place worth is being added.” RecommendedConsultancies advise companies throughout a variety of points, acquisitions, expertise and ESG. Beneath the Huge 4, there are a gaggle of mid-sized corporations that embrace Grant Thornton and Oliver Wyman.Final 12 months the monetary providers business accounted for £5.86bn of the market, the report discovered. Cyber safety work, in the meantime, was the fastest-growing enterprise line, up greater than 17 per cent from 2022 to £1.7bn. A string of high-profile cyber assaults prompted extra firms to spice up spending on areas similar to incident response advisory. Contracts within the public sector made up £1.89bn of the market in 2023, up 14 per cent from the earlier 12 months, the report said, however cautioned that uncertainty over the election would in all probability sluggish development.Prime Minister Rishi Sunak final week dominated out going to the polls in Could and has beforehand stated that his working assumption was that he would maintain an election within the second half of the 12 months.A separate survey of consultants revealed by the Administration Consultancies Affiliation in January estimated that exercise within the UK market would improve by 9 per cent this 12 months, down from 11 per cent in 2023.

May Super-Offer Beat the A.I Revolution with us - 15% OFF The Yearly Membership Plan

Biggest Discount EVER - " Unlimited Themes, Plugins and SEO Tools " 

June Super-Offer Beat the A.I Revolution with us - 15% OFF The Yearly Membership Plan

Biggest Discount EVER - " Unlimited Themes, Plugins and SEO Tools " 

July Super-Offer Beat the A.I Revolution with us - 15% OFF The Yearly Membership Plan

Biggest Discount EVER - " Unlimited Themes, Plugins and SEO Tools " 

August Super-Offer Beat the A.I Revolution with us - 15% OFF The Yearly Membership Plan

Biggest Discount EVER - " Unlimited Themes, Plugins and SEO Tools " 

September Super-Offer Beat the A.I Revolution with us - 15% OFF The Yearly Membership Plan

Biggest Discount EVER - " Unlimited Themes, Plugins and SEO Tools " 

Christmas Super-Offer Beat the A.I Revolution with us - 15% OFF The Yearly Plan - Biggest Discount EVER