As the economy returns to growth and demand for consulting services rises again, industry revenue is expected to grow 2.4% in 2011
Los Angeles, California (PRWEB) November 15, 2011
As the economy recovers and corporations require management consultants' advice again, industry revenue is forecast to improve, growing 3.8% in 2012, according to latest report from IBISWorld, the nation’s largest publisher of industry research. In the wake of the recession, many industries faced restructuring, increased regulation or change in consumer landscape. Over the next five years, this result will be excellent news for specialist management consultants as they are increasingly called upon for advice. As such, industry revenue is projected to increase at an average annual rate of 4.2% over the five years to 2016 to $203.6 billion.
The Management Consulting industry is composed of companies that provide advice and assistance to organizations on management issues ranging from strategic and organizational planning to financial and budget planning. While management consulting is a relatively new industry, major industry firms, including Accenture Ltd., McKinsey & Company and Marsh & McLennan Companies are among the most respected businesses in the world, and their advice is routinely sought by the corporate and governmental sectors.
According to IBISWorld analyst, Caitlin Moldvay, in the five years to 2011, revenue in the Management Consulting industry has increased at an average annual rate of 0.7% to $165.5 billion. Compared with the industry's overall growth during the past 10 years, this five-year rate is somewhat sluggish, reflecting the extent of the recent economic downturn. The recession's effect on industry revenue in 2008 and 2009 caused sales to plummet by 4.3% and 3.0%, respectively, as many projects were deferred or canceled. In addition to decreasing revenue, firms laid off employees, causing industry employment to fall by 7.5% in 2008 and 4.0% in 2009.
Prior to 2008 and 2009, the Management Consulting industry was countercyclical to overall economic movements since companies often rely on consultants to improve their business' strategies and services. The recession upended this pattern by causing nearly every industry to reduce its consulting budget. Furthermore, the recession decreased industry revenue because the cost of services was revaluated in the wake of declining corporate profit. “As the economy returns to growth and demand for consulting services rises again, industry revenue is expected to grow 2.4% in 2011,” says Moldvay. Improved demand will also reduce pricing pressures, causing profit to increase to 8.9% during the year, up from 5.9% in 2009.
In the five years to 2016, industry revenue is projected to increase at an annual average rate of 4.2% to $203.6 billion. In the aftermath of the recession, many industries will face continued restructuring, increased regulation and changes in the consumer landscape over the next five years. Their new needs will likely be excellent news for specialist management consultants as they are increasingly tapped for advice.
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