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The UK’s consulting market experienced a significant slowdown in the past year, with growth decreasing by over 10 per cent. This trend is expected to persist, with the sector projected to flatline in the coming year. The growth rate for the UK’s consulting market in 2023 was 4.7 per cent, resulting in revenues of £15.2 billion. However, this growth was notably lower than the 15.6 per cent recorded in 2022.
A recent report from Source Global Research attributes this slowdown to macroeconomic challenges and geopolitical uncertainties, which have created widespread unease among clients. As these conditions are anticipated to persist, the report forecasts a stricter year ahead for the consulting market, with growth expected to stagnate in 2024.
The report highlights the financial services sector as the largest consulting market in the UK, with revenues of £5.86 billion. However, the public sector has emerged as the fastest-growing segment, with a forecasted growth rate of 13.9 per cent, reaching £1.89 billion. Specifically, the public sector’s demand for IT strategy and planning services drives growth as organizations seek to improve back-office efficiencies and enhance user experiences.
Cybersecurity consulting has also seen significant demand across various sectors, maintaining its status as the fastest-growing service in 2023, with a growth rate of 17.2 per cent, amounting to £1.7 billion. The prevalence of high-profile cyber attacks has prompted companies to reassess their existing infrastructures, leading to increased investment in incident response advisory and penetration testing services.
However, despite the current demand for cybersecurity services, the report forecasts a decline in growth for this sector in 2024, with cybersecurity work expected to shrink by 3 per cent across the UK market. James Beeby, research lead at Source, attributes this downturn to companies adopting a cautious approach amid economic uncertainty. The upcoming general election is also expected to complicate public sector spending decisions further.
In summary, the UK’s consulting market faces challenges from macroeconomic conditions and geopolitical uncertainties. While specific sectors, such as the public sector and cybersecurity, have shown resilience and growth, overall market growth is expected to stagnate in the coming year.
