Digital services drive 8 per cent growth in management consultancy sector

Will Green is news editor of Supply Management
8 June 2014

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9 June 2014 | Will Green

The UK management consultancy sector grew by 8 per cent in 2013 and is now worth £4.8 billion.

In a report the Management Consultancies Association (MCA) said growth was at its highest since 2007 and it predicts double digit expansion in 2014.

The MCA data showed there has been a massive expansion in demand for digital services, which now accounts for a quarter of all income.

Paul Connolly, director of the MCA Think Tank, said: “The biggest story of this data is that the largest single service offering that management consultants offer to the wider economy is digital consulting. A quarter of all consulting activity is digital – that’s right across sectors.”

There has been a 115 per cent increase in digital management consultants, to 8,000, while the largest income stream remains financial services to the private sector (with a 35 per cent market share). The three sectors that grew most rapidly in 2013 were construction and transport (up 60 per cent), services (up 21 per cent) and telecoms, high tech and media (up 18 per cent).

Connolly said: “UK consulting’s performance in 2013 is also an advance indicator for the prospects and health of the wider economy. Businesses are seeking consulting support to develop growth propositions, so consulting is growing by helping others grow.”

The public sector’s share of total spend on consultants in 2013 amounted to £1.2 billion, around half what it was before the downturn in real terms, according to the MCA. There were “significant contractions” in central government spend, but a 6 per cent rise in the NHS and “more substantial rises” in defence and local government.

Alan Leaman, CEO of the MCA, said: “The small rise in public sector consulting is entirely understandable and welcome as it stems from real needs. MCA members would welcome even more of a proper dialogue with the public sector on how this need and its growth can be properly managed.”

The big four accounting firms’ share of revenues increased to 44 per cent, while staff numbers in these companies rose by just over a fifth.

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