Spanish consulting market grows for fifth consecutive year

06 June 2018 5 min. read
More news on

The improving Spanish economy has boosted its consulting market growth to over 7% – lifting its total value past €1.4 billion in 2017 – however political turmoil means this may falter in the coming months. The consulting market has been on a rapid road to recovery since a crash in 2011, when a number of Eurozone economies flagged amid a second recession, but now Spain’s consulting sector is expanding well beyond its 2011 value.

In 2017, analysis estimated that Spain’s management consulting industry had grown by around 6% during 2016 to reach a market value of €1.3 billion. Having declined by a dramatic 3% between 2011 and 2012, the consulting sector of Spain has since recovered thanks partially to firms finally making a concerted effort to expand their footprint to other Spanish speaking markets, exporting particularly prolifically to Latin America in particular, with Spanish firms and their clients feeling a historical and cultural tie to them, as well as a linguistic one. A year on, the tactic seems to have paid further dividends, as Spain’s consulting scene has upped its growth rate to 7.6%, according to data from Source Global Research relating to management consulting work done by mid and large-sized consulting firms (those with more than 50 consultants) carried out on behalf of mid and large-sized clients.

The impressive results of 2017 now see the value of the Spanish consulting industry recording annual revenues of €1.42 billion, towering above the value recorded in 2011, before its last period of decline, of €1.13 billion. The move may come to be seen as particularly shrewd, as consultancies look to insulate themselves from the uncertain state of the economy and political culture of Spain in 2018 – something which may impact on future growth, as businesses once again bed down into ‘wait and see mode’.

In 2017, growth in the Spanish consulting market was primarily driven forward by financial services which, along with retail, was one of the only sectors to experience double-digit growth. As many financial institutions weigh up their future in the potentially isolated post-Brexit UK, the increasing maturity of Spain’s FinTech scene has attracted fresh attention from companies considering relocation, and pushed incumbent players to improve their use of technology in their engagement with customers.

Size of the management consulting market of Spain

Zoë Stumpf, Head of Consulting Market Trends at Source Global Research said of Spanish consulting’s performance, “The consulting market in Spain really is going from strength to strength with both consulting firms and their clients now embracing the opportunities presented by new technologies, such as robotics, to change the way they operate.”

Meanwhile, in retail, bricks-and-mortar clients invested in omnichannel to fight back against online-only competitors. Mirroring trends already present in the bulk of major consulting industries, Spanish firms have subsequently already seen a boost to their digital transformation lines partially thanks to this demand from clients in the retail sector, keen to avoid losing market share to ecommerce – something which has led to the decimation of British high streets in early 2018. Digital transformation consulting is now worth $44 billion globally, largely thanks to this fear factor – and Spain’s consulting economy will likely continue to benefit from this into 2018 and 2019.

In terms of service lines of the consulting sector in Spain, this meant that technology remained the largest line by some distance, despite the risk and regulatory segment seeing double figure growth in 2017. As pressure on budgets eased amid a buoyant Spanish economy and clients took the opportunity to transform neglected business models and processes – digital work took off. Data & analytics and robotics demand likewise continued to mature, while AI remains at an experimental stage – though this leaves the market with room to grow into in the near future.

Possible issues

While the Source research seems geared toward a prosperous future, however, there is still some cause for concern, as Spain is by no means immune to the geopolitical instability that is spreading across EU member states. While Britain continues its turbulent march toward Brexit, polls in Italy, Austria and Hungary have each returned results favouring populist Eurosceptic parties.

In Spain, while the political outcomes vary, with left-wingers and centrists set to be the chief beneficiaries of on-going constitutional mayhem, the one constant is that businesses face an uncertain future in 2018 and beyond. The ousting of former prime minister Mariano Rajoy in June 2018 plunged the country into yet another political crisis following gridlocked elections in 2015 and the disputed Catalonian independence referendum two years later. Spain faces the further uncertainty of fresh elections unless Socialist leader Pedro Sanchez can cobble together a working coalition or minority government. 

Elsewhere, price pressures continues to blight the market thanks to a lack of large clients and the resulting intense competition for work among smaller companies which will not pay the same amount for consulting work. As a result, growth rates in 2018 are not expected to match 2017, as a certain amount of pent-up demand dissipates together with concerns about the impact of the political turmoil of the nation. This is not to say that growth will not remain strong across the board, driven by persistent demand around digital, but it will likely be less explosive than it was in 2017.