The German consulting market has grown by 6% last year to a value of €25.2 billion, reveals recent research form the German association of management consulting firms. For 2015 the outlook is even better, with a growth of 7% forecasted on the back of growing demand for advisory services and a number of booming domains such as digital and financial services.
According to the BDU* – the German counterpart of the Management Consultancies Association (MCA) in the UK, the German management consulting industry employs around 106,000 consultants, housed by roughly 15,400 consulting firms. The total workforce in the industry is said to be around 130,000.
Over the past decade, the German consultancy market has consistently grown in size, to its current value of €25.2 billion, making it the second-largest consulting market in Europe, after the UK. Ten years ago, in 2005, the market was estimated to be worth €13.2 billion, and following strong back-to-back growth the industry reached €18.2 billion prior to the outbreak of the financial crisis. Similar to other European advisory markets, 2009 was a dark year for the industry, though in the case of Germany the damage was limited to a contraction of 3%. Since, the German consulting market has recovered, and more recently has been steaming ahead – last year the market grew by 6%, and this year a growth of 7.4% is forecasted.
Looking ahead, BDU’s research shows that executives in the industry are buoyant about growth, painting a similar picture to that brushed by their UK counterparts two months ago in a study by the MCA. Only one in ten consulting firms expects a drop in sales, with the majority of companies stating they expect revenues to increase. Middle sized consultancies are the most optimistic, on average believing they will attain a growth rate of almost 10%.
From an industry perspective, the financial services (+8.1%) and energy and utilities (8.0%) sectors are forecasted to be the key growth drivers. Digital – a market which is booming globally – is not surprisingly the main functional area driving growth, the overlarge majority of the participants expecting related revenues to rise. The boom will have repercussions for thought leadership strategies, however, with three-quarters of consulting firms highlighting that so-called ‘Digital Labs’ and/or digital research think tanks will increase.
The German consulting market is dominated by a number of globally familiar names, including the likes of the Big Four, as well as Accenture, BearingPoint and Mercer. In the strategy consulting segment the market is led by the five US-based global market leaders (McKinsey, BCG, Bain, Strategy& and Oliver Wyman), however, the German based Roland Berger and Simon-Kucher & Partners have substantially larger market shares compared to elsewhere across the globe. The German market also boasts several names that may be less familiar internationally, yet in the DACH region (and in the case of some, also beyond) belong to the established pack. An overview of the 10 largest German origin consultancies**.
It is important to keep in mind that associations and analyst firms use different definitions for defining the management consulting market. According to Kennedy for instance, the German consulting market is worth around $14 billion, while UK analyst firm Source values the market at just under $6 billion. In the case of the latter, the scope centres around the market for the ~top 250 consultancies, with both Kennedy and BDU using a broader scope.
* BDU = Bundesverband Deutscher Unternehmensberater.
** The overview presents global revenue and total number of consultants.