Confidence matters: How our client data is helping predict consulting demand

It will come as no surprise to anyone that the conflict in the Middle East has damaged clients’ business confidence. After two consecutive quarters of improvement, the proportion of people who say their confidence has not been negatively impacted by world events (“determined” clients) has dropped from 44% in early Q1 to 25% now. Meanwhile, the percentage of clients whose confidence has significantly deteriorated (“frightened” clients) has more than doubled to 48%.

Client confidence is evolving

This data does more than simply paint a picture of how clients are thinking now. It also lets us see how attitudes are changing.

1. Confidence is now very up and down: Clients are reacting increasingly strongly and erratically to world events. The rapid increase in costs that resulted from the Russian invasion of Ukraine resulted a spike of “frightened” clients. Other events have produced similar crises of confidence. The Gaza-Israel conflict pushed the proportion of “frightened” clients sharply up to 42%, and tariffs to 55%. Now, in the wake of war in the Gulf, it’s 47%. Particularly in the last year, we’ve seen the percentage of “determined” clients swinging wildly, from a low of just 4% around the announcements of tariffs to a high of 44% at the start of this year.
2. The percentage of “undecided” clients is shrinking: “Undecided” clients (those whose confidence has been only somewhat damaged by recent events), as a proportion of total clients, have fallen from 61% in Q3 2022 to 29%  today. “Undecided” clients haven’t yet grasped the extent to which the world has changed in the last year. While “frightened” and “determined” clients recognise that we now inhabit an unreliable world in which the worst-case scenario is possible, “undecided” clients think we’re living through another period of uncertainty that will eventually end. They don’t feel the same sense of urgency to act that “frightened” and “determined” ones do because they’re waiting for the world to right itself, like a capsized boat.

Falling client confidence could drive a surge in consulting demand 

“Frightened” and “determined” clients are more likely to increase their expenditure than “undecided” clients. Sixty percent of “frightened” clients and 47% of “determined” clients expect their use of external support increase significantly in the next two years. “Undecided” clients are roughly four times less likely than “frightened” ones to say their expenditure on outside help will rise significantly: The smaller the proportion of “undecided” clients there are, the higher growth will be—which means the current trend of this group shrinking is good news for consultants.

But clients’ growing sensitivity to world events means potentially rapid changes not only in the volume of demand, but also in the kinds of external support clients are looking for.  

Although, when asked explicitly how their use of consulting services would change as a result of the conflict around the Strait of Hormuz, half of clients said their spending would continue as planned and around 10% said it would be paused temporarily, 40% told us they were likely to change the scope of the work they were doing.  

What shifts can firms expect to see? Technology remains the biggest area of expected investment, but the proportion of clients saying this will be one of the areas where they’re most likely to spend on outside help has dropped from 81% to 53%. More clients will be looking to risk and financial management. But the biggest winner is likely to be demand for data & analytics, as it so often is for clients in the early stages of any crisis. Ranked eighth in the services we ask about in the first quarter of 2026, it’s now top.  

And that’s the real lesson of this data: The world economy may have survived the last two months better than expected, but clients are already crisis mode, anticipating significantly increased costs over the course of the year. They know they’ll need more consulting help than ever, but it is going to have to pay for itself. 

What can firms do next? 

Our data gives us a unique insight into how international events are likely to impact buying behaviour. If you’d be interested in understanding more about our findings through a leadership briefing with Source’s experts, please contact us. 

Author: Fiona Czerniawska, CEO