UK business and management consulting sees sustained growth

31 December 2020

The total UK business and management consulting market is currently worth over £81 billion, according to new figures. The statistics also suggest that the market can expect to expand to a size of £87 billion by 2019, with the industry bouncing back following a slowdown in growth over the coming 12 months.

New figures from Statista show that the UK business and management consulting market is set for slow growth over the coming year, before rebounding in time for 2019, the year when Brexit negotiations are set to conclude. The slowdown is likely the result of staggered economic growth in the UK as a whole, with the International Monetary Fund announcing in July that it was downgrading its forecast for the UK due to "weaker-than-expected activity" in the first three months of the year. The global financial institution predicted that the UK economy would grow by 1.7%, compared to a previously anticipated 2%.

The combined UK consulting market is presently worth £81.5 billion, having seen growth pick up by two percentage points on the previous 12 month period, according to the Statista research. The industry expanded by 5% on 2016’s sizing, when the UK sector was reportedly valued at £77.9 billion.

Size of the UK business consulting market

Management consulting within the business consulting sector is meanwhile sized at £6.5 billion, according to Statista. This varies from the estimates of Source Global Research, who believe the market is bigger, at more than £7 billion. The Management Consultants Association (MCA), the UK’s national organ for the industry, meanwhile said that aspect of the market grew 5% last year to an estimated value of £9 billion.

The differences in size are more than likely attributable to each organisation judging the industry by varying criteria. The MCA, for instance, analyses the size of the industry according to data from its member organisations, while Source track what is sometimes terms “big consulting”, excluding deals and projects under a certain value, along with data regarding firms of a certain size. In the case of Statista, the variation seems to be in what researchers term business consulting, with some overlap between that and management consulting meaning the sector is harder to pin down.

Size of the UK management consulting market

In the coming years, Statista meanwhile expect that the management consulting sector will see growth narrow to just 1% by 2018, before recovering in the following year, at 4%. The initial slowdown is a trend that has been highlighted similarly by the analysis of the MCA, there being cited as a potential warning sign of harsh economic conditions to come, resulting from Brexit.

In terms of the broader business consulting market, between 2016, the year of the Brexit vote, and 2017, Statista’s figures show an acceleration in new uptake from 3 to 5%, while estimates suggest a slowdown to 2% is waiting for the following years. Meanwhile, compared to the UK’s present 5% growth figure, select national industries including those of remaining EU states Germany (1%) and the Netherlands (0%) trail significantly.

Business consulting market of UK

In line with the MCA’s own assertions then, British businesses could well be experiencing a slowing of headline growth, and are deferring growth-supporting projects and cutting back on discretionary spend as a precautionary measure. However, in the following year of 2019, the UK’s business consulting sector is projected to accelerate in growth, back to 5%. This could be in anticipation of further economic turbulence, as businesses make the most of the very final days of life in the EU to complete precautionary restructures with the support of consultants. However, it could also be a result of improved market conditions, giving clients the confidence to invest in the future of their businesses.

The uncertainty surrounding the prospects of Brexit were this week exemplified by two conflicting projections. The Bank of England has predicted Britain stands to lose as many as 75,000 financial services jobs following the culmination of Brexit in 2019. On the other hand, the UK remains the top destination for global dealmakers looking to invest in Europe, according to an EY study, despite uncertainty resulting from Brexit, with over half of some 3,000 worldwide executives polled saying they were planning a deal in Britain within the coming 12 months. The consulting industry could be a beneficiary in either a positive or negative economic climate in the short term at least – however, beyond 2019, the industry may well face tough times should clients scale back their spending on external expertise during times of slow growth.

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