US consulting firm leaders confident about consultancy growth outlook

12 September 2017 6 min. read
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Despite an increasingly uncertain economic and geopolitical outlook in the country, the US consulting market remains extremely confident. New figures show up to 91% of thought leaders in the industry expect the consulting market to have grown by more than 5% by the end of 2017. A further 66% believe that the US sector will grow by at least 10%, while just 2% expect a downturn.

The US consulting industry is the largest and most mature market of its kind, accounting for nearly half of the world’s consulting economy. The US advisory industry has seen sustained expansion over the past five years particularly, with 2016 proving a strong year for the segment yet again. Over the course of last year, the industry saw growth of 7.1%, and reached a value of $58.72 billion.

Now, according to the 2017 Executive Outlook from ALM, conducted among more than 100 senior advisors, the economy is expected to grow by a further 10% according to as many as 66% of industry leaders. Revenue growth has been consistent in recent years, and looks set to continue to be fuelled by digital disruption. Consulting firm clients are increasingly seeking to leverage the same technologies that have made their respective industries so competitive, in order to future-proof themselves through digital transformation – a global market which is itself worth a hefty $23 billion.

Expectations for US consulting market growth

Pedal to the metal

According to the survey, consulting firms look to make the most of the positive market momentum pre-dating the current White House administration, and to expand operations while the going is good. However, they are also prepared for less favourable circumstances, which could possibly see their transformative services in even higher demand.

While in the early days of the Trump Presidency, American businesses were poised for a period of upheaval to key industries such as healthcare and financial services, the repeal and replacement of Obamacare has stalled, along with pledged infrastructure spending, despite what appeared to be bipartisan support for increased spending. Three quarters of the way through 2017, a real “Pedal to the metal” mentality is yet to materialise outside the consulting market.

Based on interviews with consulting firm leaders, the study shows that the industry appears more confident than it did last year – a time when assurance was still relatively high. In 2016, 90% of executives interviewed stated a belief that there would be average growth of at least 5%, while 63% expected higher than 10%. Linking to the fact the average firm has seen an estimated 7.7% increase on revenues between 2015 and 2016, it’s clear to see the results of the previous period have left executives in a bullish mood regarding their future prospects. With some firms even reporting growth as high as 20%, while the US consulting industry now accounts for 46% of the global consulting market, most believe 2017 will turn out to be a bumper year too.

With the uncertainty surrounding a variety of geo-political conditions, including the increasingly fraught relationship between North Korea and the USA, and ongoing Brexit negotiations, economists have continuously predicted that the globe is likely still in slow-growth mode, with the global economy continuing to have to settle for growth below 3%. However, consulting firm leaders are seeing no signs of a slowdown as they continue to report key areas of business remain strong, with contracting digital and strategy consultants proving to be increasingly essential for businesses if they are to remain profitable.

Size of the US consulting industry

Based on the results of the Executive Outlook survey, the consulting profession remains optimistic about where it is and where it’s heading. When asked about their business over the last 12 months, as well as what they’re expecting in 2017, 91% of respondents think 2017 will see growth higher than 5%, and 66% expect growth over 10%. With 7% growth resulting following last year’s predictions, the sustained confidence of the industry would suggest 2017’s final figures will remain in this region, if not exceeding it.

All in all, a super-majority of 98% of executives are forecasting at least some level of consulting growth. Some 80% of firm leaders also reported improvements to their net profits in 2016, suggesting this as the root for most firms’ confidence. In 2017, an even larger 96% of firm leaders now anticipate net profits to improve, while only 1% expect shrinkage this year, and 3% anticipate no change. Up to 57%, up 2% on last year, meanwhile, think net profits will rise more than 10% in 2017.


While the figures suggest that the consulting market is certainly positive on future profitability, they also demonstrate that industry leaders are more reserved on the matter. One arguable cause of this is that a residual pressure on fees remains, partially due to the global recession of ten years ago, and partially thanks to changing client expectations and demand. With an increasingly competitive mid-market, consulting firms are expected to deliver better value for money than perhaps ever before, as, like any other industry, smaller and more agile companies leverage new innovations to try and carve up market shares of previously untouchable market incumbents. These firms also often benefit from match-making platforms like Talmix and blur, which match clients with consultants best suited to their needs and budgets, meaning top firms can no longer simply rely on their reputations to justify inflated fees.

Expectations for US consulting market growth - profit

Meanwhile, maintaining profitability of projects has become difficult for firms who struggle to maintain financial visibility, or prioritise employee retention in this climate. Losing out on visibility or top talent to rival firms has become extremely costly for consultancies looking to compete among innovative boutiques and independents.

Along with the aforementioned geo-political issues that may hinder the market, ALM’s survey also asked participants to rate how concerned they were about certain internal and external issues coming into 2017. Matching the above issues of profitability, the survey showed that new client business development and client retention continue to top the list, demonstrating that executives are well in line with what needs to be done to boost sustainable profitability in line with rates of revenue growth. In previous years, pricing pressures and sales cycles were top of executive priorities. Meanwhile, internally, the other biggest concerns in 2017 are setting new strategic goals/direction, resetting compensation expectation and voluntary retention.