23 August 2001 | David Arminas
Income growth for management consultants slowed dramatically in the second quarter of 2001, suggesting the sector is following overall UK trends.
Income revenues were up 1.3 per cent on the first quarter, when they were up 4.3 per cent from the fourth quarter 2000.
"Growth is not as high this quarter, but it is still too early to tell if it is a trend," said Sarah Taylor, deputy director of the Management Consultancies Association (MCA), which compiles the quarterly statistics.
Income from management consultancy services rose 2.1 per cent, from IT consulting by 3.1 per cent and from outsourcing by 9.3 per cent.
Taylor said strong IT and outsourcing income indicates that corporate "back to basics" is continuing. "When times are not good, firms look to switch the emphasis of consultancy work, to reduce costs and extract value through technology," she said.
Development growth for 2000 was 21 per cent, but a drop to between 12 and 15 per cent for 2001 is likely, added Taylor.
Growth for consultancies in the European Union was 18 per cent for 2001, according to figures from the European Federation of Management Consulting Associations, an umbrella organisation for 23 European consultancy associations.
The MCA survey found that 82 per cent of members thought the adoption of the euro in the next five years would benefit their clients. None said it would be detrimental and 18 per cent said it would have no impact.