The US consulting industry has over the past year yet again booked a strong performance. In 2013 the market grew by 5,7%, taking the industry size to a total of $41.5 billion in revenues. Also for the coming year the outlook is optimistic – a growth of 5% is forecasted.
In 2011 the American consulting market was estimated at $41.5 billion by Source, a British-based analyst firm that specializes in industry research. In 2012 the market grew by 8,5% and last year again a growth rate of above 5% was booked (5,6%), bringing the total market size to $41.5 billion. In comparison, the world’s second largest consulting market – the UK – is estimated at $9.4 billion, roughly one-fifth of the US size.
Tom Reichert, Chairman of North America at BCG and one of the partners interviewed by the analysts, confirms that consulting firms find themselves in prosperous times. “There are huge opportunities. The market is becoming more global and more reliant on deep expertise. Clients are making bold, innovative moves to stake out positions for the next decade. We're helping them figure out the answers they need in order to leapfrog ahead.”
Per Industry and Function
The largest growing sector within the US consulting industry was the healthcare sector – up 9.5% to $4.5 billion. On the back of major restructuring and regulatory transformation the financial services segment also grew strongly, up almost 9% to $9 billion. By contrast, federal and state government consulting was the only sector in the US to shrink - with expenditure falling by 1.5% to $7.78 billion.
From a service perspective, the report found that the strongest growth was in technology with 7.6% growth, taking it to more than $10 billion. Operational improvement – the biggest service line in the US consulting market at $13 billion, remained strong, growing by 6.3%.
War for talent
The report from Source in addition highlights that with demand rising so quickly a bottleneck might occur on the supply side, particularly with the supply of talent. An analysis reveals that three quarters (76%) of the US consulting market is based in just 15 cities, and over half of this (53%), is based in just three – New York, Washington and Chicago.