Last year the US consulting market grew by 9% to over $50 billion. Latest estimates from market analysts reveal that 2015 is yet to be another bright year. Finance and risk management lead the growth at around 12%, followed by technology consulting at 10%. Particularly tech advisory is expected to stay in demand over the coming years, providing a strong basis for continued high growth in the US consulting market.
Big time growth
The US consulting market is the largest in the world, representing 55% of the $101 billion global market in 2014, making it nearly 8x the size of the UK consulting market, and more than 11x the size of the Australian advisory market. Not only is it the largest market, it is also one of the fastest growing in Western economies, adding 9% in 2014 – an increment which represents the equivalent of roughly half of the German consulting industry (third largest globally, and just behind the UK). This year’s growth too is expected to be a blazing 10%. Yet with the US consulting sector already being relatively mature, while growing at emerging market rates, concerns are being raised about the sustainability of the growth trajectory
According to a recent study by Source Information Services, a UK-based analyst firm, concern about the rate of growth can be put to rest for the time being – with the strong growth a reflection of strong fundamentals in the US rather than the outward symptoms of another bubble. The researchers see three major factors driving the consulting figures in the US: the US economy’s strength; clients’ use of consultants; and technological development, with an emphasis on digital transformation.
The rise in the US GDP of between 2% - 2.5% annually projected for the coming years mean that firms have more funds available for investment in consulting advice in at least the near term. And with many executives still keen on hiring providers to deal with problems – with inhouse teams remaining relatively expensive – consults continue to reap the benefits of demand. The biggest issue to solve for clients, and thereby the biggest boon for the consulting industry, remains digitalisation.
Of the different consulting segments, financial management and risk consulting remains the fastest growing – although the market itself remains relatively small – at 12%. The second fastest growing sector is technology, which is expected to grow by 10%. Relatively lagging – but still with fierce growth – are operational improvement consulting and strategy consulting at 7% and 8% respectively.
The transformation of businesses – particularly large corporates – into behemoths of the 21st century through digitalisation remains a cash cow for many consultancies, and thereby, a major growth factor. And with businesses seeing the direct benefits of digitalisation within their competitors’ value chains, demand for such transformations are expected to remain high – and with it, demand for consultants.
According to a survey held among 9,000 consultants in North America, McKinsey & Company, Bain & Company and Boston Consulting Group are the best consulting firms to work for in the US and Canada. The advisory units of Deloitte (Deloitte Consulting) and PwC (PwC Advisory) complete the top five.