Germany and the US overtake the UK in the list of the world’s most attractive consulting markets in 2016
The $50billion US consulting market looks set to grow by more than the total size of any other geographic consulting market (except DACH and the UK) in 2016...
After being ranked the most attractive consulting market in 2015, the UK has slipped to third place in 2016 - overtaken by the DACH (Germany, Austria, Switzerland) consulting market and the $50billion US consulting market. The Index, published in a report by Source Information Services (Source), found that the situation with the UK is much as it was last year, and it’s simply been overtaken by two even more attractive markets.
The Source report also found the average consultant in Germany (by far the biggest part of the DACH market) is earning about 80 per cent more for their firm than their nearest counterpart elsewhere. Source says that this is largely because German clients insist on using consultants to provide high-end strategic advice and specialist skills rather than the more commoditised services, including contingent labour, for which they’re often used elsewhere.
The $50bn US consulting market came a very close second to Germany. Source says that it’s hard to see how consulting firms can go wrong investing in the US as it is by far the world’s largest consulting market – with a growth rate that ranks alongside, and even ahead of, emerging markets. If, as Source predicts, the US consulting market grows by 10 per cent in 2016 its size would increase in a single year by more than the total size of any geographic market except for DACH and the UK.
Edward Haigh from Source Information Services commented:“In addition to its world leading revenues per consultant, the DACH consulting market is also attractive because it’s growing well, and is a market in which the use of consultants is well-established in the minds of clients.
Equally, there’s little not to recommend about the US consulting market. Digitisation seems to be turning from talk into action and boosting the market in a way that spells good news for expectant consultants the world over.”
Australia remains a hugely attractive consulting market – ranking 4th in the Index
Despite the belated impact of the global financial crisis and a volatile political situation that wasn’t really a feature of Australian business life in the past, its consulting market is now among the biggest in the world (valued at $4.2bn) relative to the size of its economy. It also has a good supply of highly-qualified talent; its consultants make a decent amount of money for their firms; and there are signs that growth may be picking up again.
The star of the show in growth terms is once again the GCC
Growth in the GCC consulting market has slowed, but it’s doing so from an enormous rate and should still hit about 13 per cent in 2016. However, Source says that if the oil price continues to remain low, then it’s hard to see how it won’t eventually start to weigh heavily on the prospects for consultants in the region. But there’s not enough evidence yet to suggest that consulting firms should steer clear of increasing their investment in the GCC - or that the GCC is about to stop being one of the brightest stars in the consulting firmament.
Edward Haigh from Source added:“The GCC consulting market as a whole is increasingly resembling a mature consulting market. Indeed, relative to the size of its host economy, the GCC consulting market is now bigger than those of many mature markets, including the Nordics, France, Benelux, Iberia, and Italy. There are quite big differences from one individual market in the GCC to the next - but viewed as a whole, it challenges the notion that this is an emerging consulting market, even if it’s an emerging economy.”
Growth in India leads to a rise of six places
India, which was rated the joint 14th most attractive consulting market last year, is now rated 8th as growth returned. However, there’s a bit more uncertainty about India: although likely to deliver double-digit growth in 2016, recent history has shown that it is an emerging market that can easily slump to very mature growth rates. Consulting firms trying to assess their long-term commitment to the Indian market, won’t feel confident that growth isn’t going to dry up again.
Russia hits rock bottom
At the bottom of the Index, Russia’s consulting market is going backwards at an alarming rate, reminding those who got excited by a phase of double-digit growth that volatility reigns supreme. In truth there’s plenty of consulting happening, but its value is being undermined by the impact of a falling ruble, and as long as Russia’s political ambitions continue to impact its economic fortunes it’s hard to see things picking up much.