- Hayne Royal Commission’s investigation drives risk & regulatory work for consultants
- Digital work now accounts for nearly 40% of all revenues...
Australia’s consulting market grew at its fastest rate in seven years in 2018, expanding 8.1% to US$5.4bn—a growth rate similar to the mighty US and DACH markets last year. The Australia consulting market has now grown by almost US$1bn in just three years.
This strong market growth in 2018 owed a lot to growing interest in digitisation, with the share of Australia’s consulting work that can be described as digital rising to account for almost 40% of revenues in 2018.
This data is published today (24th July 2019) in a new report, The Australia Consulting Market in 2019, from Source Global Research, the leading research and strategy firm for the global professional services industry. The report also reveals that Australia’s consultants enjoyed revenue growth across every sector in 2018, with the healthcare consulting market growing the fastest. There was also strong growth in the financial services sector as clients undertook regulatory reforms in the wake of the Hayne Royal Commission’s investigation.
Commenting on the strong growth in financial services, the largest sector for consultants in Australia, Zoë Stumpf, Head of Market Trends at Source Global Research, said:, “The Hayne Royal Commission has led to a huge amount of work among financial services clients who, faced with considerable criticism of their business practices, have been keen to work with consultants to put in place a more robust risk & regulatory framework. As well as compliance work, this is leading to widespread demand around governance and strengthened risk management approaches.”
Public sector consulting marketDespite all the election-related disruption and controversy, the Source report found that the Australia public sector consulting market grew 8.2%. Source says that now that the dust has settled on the election result, public sector consulting work is likely to continue to increase; perennial areas of need continue to drive demand, and the sector is seeing an uptick in digitisation and cybersecurity work. However, with spend on consulting now under the microscope, it’s likely that growth rates won’t be quite so high as in the last couple of years.
Karthik Padmanabhan, ANZ Leader at Cognizant, said:“Government spending is pretty significant in Australia, and I think this will be a key influencing factor on the market in the near future.”
The fastest-growing service lines were technology and risk & regulatory, though consultants in Australia saw a boost in demand across the board.
Type A firms, dominated by the Big Four, represent the largest and fastest-growing firm type in Australia’s consulting market, thanks to client appreciation of their multi-specialist and end-to-end offerings. Technology firms continue to grow strongly, though encroachment by Type A and strategy firms means they’re not growing as fast as the technology service line.
Despite 2018’s strong performance, Source says that Australia’s consultants report a creeping sense of anxiety, as a number of factors—including slowing GDP growth, a projected global economic slowdown, a contentious domestic political environment, and an increasingly uneasy relationship with China—mean that the market is a good deal more volatile than in years past.
Zoë Stumpf from Source added: “The growth curve could start to slow a little, as clients balance the need to deal with new types of competition and embrace technology change against concerns about economic growth; indeed, clients are likely to proceed more cautiously with their change plans as a result.
However, consultants need not despair, as there will still be plenty of good opportunities in this market; we expect to see growth of around 7% for 2019, with slightly slower growth forecast in 2020.”
For more information on Source reports contact firstname.lastname@example.org, telephone +44 (0)20 3478 1204, or visit www.sourceglobalresearch.com.