The UK economy is currently suffering a double-whammy of unfavorable circumstances. First, the impacts of the country’s decision to leave the EU have been dragging down the British economy for the last 4 years. Uncertainty persists and there is still little indication of what Britain’s future trading relationship with the EU will actually look like.
The other significant factor affecting growth is the Covid-19 pandemic, which has caused an unprecedented reduction in economic activity, the long-term impacts of which we won’t know for some time.
Despite these challenges, the UK remains a significant market for consulting firms and finished 2019 retaining its status as the second-largest national consulting market. Of course, those figures were collated prior to the coronavirus outbreak. The impacts of the virus on the British economy have been significant, but will they be enough to knock the UK off its current position?
The State of UK Industry
The consultancy market across the EU and UK is massive. In fact, by the end of 2019, the consulting industry in Europe was worth a whopping $45 billion. Both Germany and France have seen significant growth in their domestic markets, while the UK’s growth has slowed somewhat since the Brexit vote. However, even with this slowdown, the United Kingdom remains second only to the USA in terms of the size of its consulting market.
While the slowdown in the UK’s market growth will undoubtedly cause alarm for some, the general consensus is that the UK remains a strong consulting market even though it is growing at its slowest rate in almost a decade. At this growth rate, the UK still finished 2019 with 8.6 billion pounds of revenue. This represents just under 7% of the global revenues for consulting businesses and means that the UK remains ahead of its nearest competitors.
The UK’s nearest competitor is Germany, who are now catching up with the UK thanks to the Brexit-induced slow down. By the end of 2019, Germany accounted for 6.5% of the global consulting market, a significant increase on previous years. However, while the United States, the United Kingdom, and Germany are all significant consulting markets, the next nearest competitor is Australia who finished 2019 with 3.8% of the market.
While the UK is not going to catch up with the USA market anytime soon, the US alone can lay claim to some 44.5% of the global consulting market, so it remains a firm leader within Europe. The slowdown in growth in the UK is significant, but the UK is not the only European economy whose consulting market is running into difficulties. Germany has been undergoing serious economic turmoil for a while now and the coronavirus outbreak is likely to exacerbate this situation.
The coronavirus pandemic has impacted businesses and entire industries across the globe – no one has been spared from the impacts of the virus. However, with such serious economic uncertainty, there is a renewed interest in consulting services from many businesses. As a number of businesses adjust to a new reality and make plans for or lower growth or stagnation over the course of 2020, consulting firms are going to have a significant role to play.
Despite the current difficulties facing the global consulting market, it is expected that this dip in activity will be counteracted by an expected rebound once a sense of stability returns to the global economy. The current slowdown has also not affected the number of students who are pursuing degrees related to business management and consulting. As this article from Aston Online makes clear, business and management degrees equip students with exactly the kind of knowledge that they need in order to work effectively as a management consultant.
What Does the Future Hold?
While there is undoubtedly going to be a reduction in demand for many consulting businesses in the wake of coronavirus, there will be some firms that are able to turn this crisis into an opportunity. So far, the UK appears to be much more resilient than many people expected and the British consulting industry seems to have suffered less of an impact than the rest of Europe.
No one can say with any certainty how long the economic shock of Covid-19 will last or what its long-term impacts will be. However, if the situation continues to develop along the same lines that it has been thus far, the UK would seem to be in a very strong position to weather the storm.