Brazil’s consulting market experienced another difficult year in 2016 – growing only 0.1 per cent to reach a value of US$1.18billion.

These figures are published in a new report (10th October 2017) by Source Global Research, the leading research and strategy firm for the global management consulting industry. The report says that beneath the flat market lay performances by individual firms that varied quite widely, but despite this, few are likely to look back on 2016 with fond memories.

With Brazil continuing to experience what many describe as the worst economic crisis in the country’s history, clients are absorbed in the issue of keeping afloat, so those consulting firms able to offer operational improvement and cost reduction services were the ones that performed more strongly. Price pressure remained a significant feature of the market, and as a result, consulting firms were forced to cut costs internally to cope with a widespread reduction in fees.

The report says that despite all the issues affecting Brazil, firms continue to recognise that it remains the most important market in Latin America, and that it is vital to have a presence in Brazil, as its geographical position at the heart of the region also makes it a useful jumping off point from which to tackle surrounding countries such as Colombia, Argentina, and Peru.

Using the biggest and most sophisticated model of the global consulting industry, Source also found that 2016 was the year when interest in digital really started to take off in Brazil, as clients recognised its potential to improve their businesses. One of the biggest areas of interest in digital take-up is in its potential to cut costs and improve efficiency, with significant interest in data & analytics. However, interest in digital is, in the main, more talk than action, though consulting firms are working hard to ready themselves for expected growth in this market.

Zoë Stumpf, Head Analyst at Source Global Research said:“Given the challenging economic and political conditions, it’s no surprise that performance across many industry sectors and service lines was sluggish. 2016 saw most clients concentrate on getting on with the here and now, with a good proportion of demand stemming from initiatives focused on improving productivity, ensuring slightly higher than average performance in the operational improvement service line.”

Wladimir Constante, Executive Vice President – Client Delivery Brazil, at Alexander Proudfoot, added: “Clients needed help with efficiency, cost reduction, and operational improvement work and that generated large, profitable contracts for us. As a result, we performed very well in 2016.”

With things starting to look up for the Brazilian economy during 2017, the Source report says that most consulting firms are cautiously optimistic about their prospects for growth. Increased digital take-up is likely to help with this, though there are some concerns that the election in 2018 could be a destabilising factor.

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