Growth in China and India has helped offset declines in demand from developed countries
Los Angeles, CA (PRWEB) June 12, 2013
After years of strong performance, the Global Management Consultants industry has fallen upon hard times. In the years through 2008, year-on-year revenue growth was steady and even particularly strong in 2003 and 2004. But then “in 2009, the situation deteriorated as the economies of the United States, Europe and Japan all slid into recession,” says IBISWorld industry analyst Doug Kelly, “causing companies to defer or cancel discretionary expenditure, including on management consultants' services.” As a result, industry revenue contracted 2.6% in 2009 and fell another 3.5% in 2010.
These relatively mild declines actually indicate that management consultants have been somewhat insulated from the full effects of the global economic downturn. Asia's rise in the global economy has given the Global Management Consultants industry a large boost via China and India. This growth has helped offset weaker growth from the developed nations that dominate the industry. Consequently, IBISWorld estimates that global industry revenue is growing at a 0.4% average annual rate from 2008 to 2013.
The industry also benefits from some countercyclical demand for services. “In good times, companies invest heavily in profit-maximizing activities and rely on consultants to ensure they develop effective strategies to do so,” Kelly says. “In a downturn, many companies still require consulting advice to mitigate their losses, which creates a base level of demand that the industry can rely on when times are tough.” Global industry revenue is expected to increase to about $334.7 billion in 2013 due to economic growth in China and emerging economies, along with a slow recovery in developed regions. There is still significant uncertainty regarding developed economies' recovery, though; recovery in the United States and Europe is anticipated to be gradual and prolonged, and this will also hamper revenue and profit for management consultants in the near term.
When the global economy does eventually emerge from its present difficulties, management consultants will experience renewed revenue growth and rising profitability. Industry revenue is expected to grow faster than expected global GDP growth. This trend is unlikely to slow down, as sustained growth in Asian markets will continue to encourage consulting firms to establish themselves there, particularly in India. Current major players in the industry include Accenture Ltd., Deloitte Touche Tohmatsu, McKinsey & Company and Booz Allen Hamilton Inc. For more information, visit IBISWorld’s Global Management Consultants industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
Management consultants provide advice and assistance to organizations on strategic and organizational planning; financial planning and budgeting; marketing objectives and policies; human resource policies, practices and planning; production scheduling; and control planning. Although this industry does not incorporate information technology (IT) or computer consulting services, any revenue generated from IT strategy services are included.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on nearly every US and Global industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.