Growth within the UK consulting market has been slowing since 2014 according to research published by Source Global Research. The research organisation for the professional services industry found the UK consulting market grew by 5.6% in 2018 to hit £8.2bn, but growth slowed from the 6.1% reported in 2017, and 7.5% the year before.
Nevertheless, the market for UK consulting services is reported as stable, particularly given the demand for professional services to advise on the ramifications of the UK’s decision to leave the EU. Only last month it emerged local authorities are increasingly using consultants to meet statutory obligations to deliver services in planning, housing, education and environmental protection (EA 12-Feb-19).
Yet despite the "Brexit boom" for consultancy support, Source Global Research has raised concerns that the narrowing growth trend suggests that beyond Brexit, clients appear to be "scaling back spending".
"A fall in exports, declining foreign investment, and rising inflation are undoubtedly impacting clients’ ability to invest," said Source Global Research in an extract of the report. "Forecast GDP growth in 2018 of 1.4% was not only less than 2017’s growth rate, but put UK growth behind that of other major European economies, namely Germany and France."
"While Brexit-related demand has generated a good pipeline of work for many firms, some found their clients largely restricting themselves to must-do work, with more discretionary programmes in shorter supply - or at least more difficult to get off the ground."
"At the same time, there were firms that had a bumper year in 2018. It’s been said many times before, but uncertainty and disruption can be positive for consulting firms called upon to support clients as they work through their difficulties. And of course, it’s not just Brexit and a slower economy creating this backdrop of disruption.
Source Global Research’s market assessment looks at the performance of around 1,600 global consulting firms with more than 50 employees, or those deemed to be mid or large-scale players, alongside higher estimates for around 400,000 firms around the world. The firm also surveyed 600 senior clients of consulting firms across the UK.