Overall demand for consulting services is still strong—but becoming less predictable
Boom markets typically see a reasonably even distribution of growth, like a rising tide that raises all boats. But softening of demand in the consulting market is resulting in significant variation between different sectors and geographies.
We can illustrate this with two examples: productivity improvement and strategy consulting.
The operational improvement consulting market was worth fractionally under $33bn in 2022, roughly equivalent to 14% of the global total. Overall growth this year is forecast at a respectable, but not stellar, 8%—but tucked underneath this headline number is one of the highest growth opportunities in consulting outside of technology services.
Given the economic environment, it’s no surprise to see productivity improvement/cost-cutting the most discussed topic among senior leadership teams. In data we’ve gathered from 10 major markets in the last four months, 40% of respondents said this was the case, compared to the 30% who cited digital transformation, the next most frequent topic of conversation (see figure one). Our snapshot of client sentiment, captured in April, explains why: While clients think that some problems contributing to the “poly-crisis” have peaked—consumer trading being down, issues procuring materials, managing the complexity of international markets—the biggest factor depressing confidence is that costs are continuing to rise, eating into profits.