Management consulting firm’s[1] fee income grew by 7 per cent in 2012, with international work amongst smaller specialist consulting firms continuing to show growth. These results are based on a survey of MCA members and other consultancies. The MCA represents the UK’s management consulting industry.
Over the next twelve months, a third of MCA members expect their overseas income to increase slightly[2], and one in five expect it to rise markedly[3]. Leading figures in the consulting industry identify Asia and the Middle East as the most important areas for growth.
Financial services continues to contribute the largest share of MCA members’ fee income from the private sector (40 per cent), but the two sectors that grew most rapidly in 2012 were construction and transport (up 31 per cent) and retail (up 25 per cent). The MCA says that these sectors account for much of the growth in services. In contrast, after strong growth in 2011, spending on consultancy by manufacturing companies declined this year.
Alan Leaman, CEO the MCA said:
“Emerging economies are still expanding and global firms are very often using UK based consultants to undertake work in their operations overseas. The UK also boasts a number of specialist smaller firms which are able to compete effectively all around the globe.”
IT Advice in demand
Consulting services in demand include financial systems and analysis, operational performance, project management and information technology. Management consulting around IT is the strongest of all these activities, generating almost a fifth of fee income (19 per cent). Together these services account for almost two thirds (64 per
The MCA says that a decline in HR consulting is a little surprising, since it might be expected that clients would wish to ensure that employees are especially motivated and committed in tough times.
Public sector starts to open up to smaller consulting firm
This year’s industry data suggests that smaller, specialist consulting firms are starting to win a greater share of consulting work in the public sector, particularly from central government, the NHS and local government. This finding coincides with the launch of the Government’s new ConsultancyONE framework which is designed to create greater access for public sector buyers to consulting from smaller firms.
As expected, the consulting industry as a whole saw an increase in public sector work following two years of dramatic decline. The MCA says that future spending levels in the public sectors are likely to be influenced by the outcome of the forthcoming spending review and the state of the economy at the time of the 2015 General Election. The fee income from public sector work remains 21 per cent lower than before 2010.
Alan Leaman commented:
“The public sector often gets a bad press but, as the recent MCA awards demonstrated, it is a myth that you can’t improve services while also making savings. The effective use of consultancy will enable the government to deliver this agenda. The advent of ConsultancyONE gives the public sector a new opportunity to deliver maximum value from its use of consulting.”
Future Expectations
Looking forward to the next six months, MCA members are forecasting that the economic pressures experienced in 2012 will either continue or intensify. Only a quarter of member firms report an improvement in their order books measured by the number of projects.
Alan Leaman concluded:
“As this data shows, there are still opportunities for growth despite the economic pressures. We are living through a period of unprecedented change, which often requires organisations to learn new skills or to access external advice and support. This is where future economic growth and prosperity will come from, and it is great that the UK’s consulting firms are playing such a key role.”
“For instance, the Financial Services sector’s reform is not yet complete, and with the UK government still planning to create a Chinese wall between retail and investment banking, it is reasonable to anticipate that there will be considerable consulting opportunities in the sector for the next five years.”
[1] Fee income of MCA member firms that represent approximately two thirds (65 per cent) of the UK consulting industry.
[2] Expect increase of 5 per cent.
For more information, please contact:
David Pippett
Director
DWP Public Relations
Tel: 01225 335675/Mobile: 07899 798197
Email: david@dwppublicrelations.co.uk
The Management Consultancies Association (MCA)
The MCA is the representative body for management consultancy firms in the UK. Its mission is to promote the value of management consultancy for the economy and society as a whole. The MCA's member companies comprise around 60 per cent of the UK consulting industry, employ around 30,000 consultants and work with over 90 of the top FTSE 100 companies and almost all parts of the public sector. The UK consulting industry is amongst the best in the world and a vital part of the business landscape.
Compliance with the MCA's tough entry criteria and rigorous Code of Practice means that MCA member companies are widely acknowledged to provide high quality services to their clients.