UK remains the globe's second largest consulting market

23 March 2020 3 min. read
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Despite slowed growth in the UK, the management consulting market of England, Wales, Scotland and Northern Ireland has remained the globe’s second largest. Nearest rival Germany accounts for 0.3% less of the global consulting market than Britain.

Such is the dominance of US consulting, that its status as the world’s largest consulting market barely bears mentioning anymore. The global consulting market grew by about 8% to $160 billion in 2019, but accounting for 44% of that, the US saw another year of meteoric growth last year according to Source Global Research. While it is still undeniably America first when it comes to consulting, however, the battle to be the second largest consulting market is much more tightly contested.

According to Source, the UK consulting market is growing at its slowest rate in seven years. Despite its tepid estimated 4% growth in 2019, however, its £8.6 billion of revenues still accounts for around 6.8% of the global market – leaving it out ahead of close rivals Germany, as well as the more distant Australia and France.

UK is the globes second largest consulting industry

Germany makes up 6.5% of the global consulting market, but has been badly impacted by the country’s struggling economy more generally. Australia meanwhile saw strong government investment buoy its consulting market to 3.8% of the global market – ahead of France’s 3.5% and China’s 3.4%.

The growth of the UK’s consulting market might have strengthened its position as the US’ number two, but it is experiencing a troubling period of slow growth. Source’s data shows that since 2016, revenue growth has halved in the consulting sector. It has been a steady drop-off, as over the last few years consultants have been regularly called upon by clients to help prepare for the impacts of Brexit.

UK's management consulting industry size

Consultants have helped large numbers of companies to prepare for stagnant growth, if not an outright recession being caused by the UK’s withdrawal from the EU, and its subsequent redrawing of trade relations with its biggest economic partner. Now though, as the Brexit process nears its end and the global economy as a whole seems set for a major downturn, many clients are putting off new contracts.

At the same time, the economic impact of the Covid-19 outbreak means that consulting demand across Europe may fall by 28%. Britain’s position is weaker than a number of other economies in the region due to the remaining uncertainty around Brexit, so this could be even worse in the UK.

Speaking about Source’s findings earlier in March, Senior Analyst Fergus Blair warned that clients in the UK and US are increasingly likely to “push back on fees they think are too high.” He added, “Clients are less willing these days to pay high rates for junior [consultants] – more are saying they don’t see the point in paying large amounts of money for access to people who don’t yet have deep sector or technical expertise.”