Australia's management consulting industry tips the $5 billion mark

20 November 2018 Authored by Consultancy.uk

Australia’s consulting industry has enjoyed another strong year, booking its highest growth in five years to hit a value of $5 billion. The financial services and energy & resources sectors still account for the largest segments of the market.

Following years of consistent growth, Australia’s management consulting market tipped the historic high of $5 billion in 2017, on the back of 7.1% growth. In the past year, a combination of several signs point toward continued significant market growth within the consulting industry.

According to the latest available research by Source Global Research, a UK-based analyst firm for the sector, the combination of Australia’s management consulting market growth in 2017 and the exceptional growth posted by the Big Four firms earlier this year bodes well for the future, with high growth in 2018 projected amid a bourgeoning professional services market.

This sees Australia’s consulting market improve on last year’s figures, when it grew by more than 5% to a value of $4.6 billion, which was also faster than in 2015 and more than in 2014.

Size of Australia’s management consulting market ($ / billion)

The exponential upward trajectory the industry is enjoying comes in line with global trends, the growth is thought to have been driven by a strong economy, renewed client focus on growth, and a healthy appetite for digital projects, as well as continued business from the public sector.

The global consulting market is estimated to be worth $135 billion, having risen by a total of $8 billion since 2016. While the leading markets within those figures remain the North American market (48% of the industry) and Europe (30%), the Asia Pacific region is rising fast, now accounting for 14%.

Different sources measure the consulting industry according to varying criteria. Source Global Research takes into account firms of a certain size and turnover, compared to other less stringent methods which often yield larger estimates for less developed markets. This means ALM estimates Australia accounts for 9.3% of the APAC market, but these estimates imply it holds a much larger 26% of the regional pie. Other analyst firms that indulge in market sizing include Plunkett Research, Gartner and market associations

Size of the global management consulting market ($ / billion)

In comparison to other leading industries, Australia seems to be growing quickly. While the UK consulting industry is still believed to be roughly twice the size, its growth in recent years has been far slower. Partially, this has been due to the fact the UK scene has come under pressure as clients scale back spending amid anxieties relating to Brexit, but another reason could be that Australia’s market is less saturated at present, offering greater potential to grow.

All in all, buying in the local management consulting industry of Australia is dominated by four main categories, including financial services (estimated as accounting for 23% of the industry), energy & resources (21%), the public sector (18%), and ‘other’ (38%), which includes technology-based businesses

Australia’s public sector in particular makes up the equivalent of roughly $1 billion of the industry’s revenues annually. However, while this has often seen the nation’s government criticised for its heavy allocation of public funds to private entities, it is worth noting that according to the MCA, government and public consulting in the UK is estimated at an even higher 25% of the market, suggesting Australia sees its consultants benefit proportionally less from such funding than other equivalents.

For more information, see the article 'Australia’s management consulting market set to expand' (on Consultancy.com.au).

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