Consulting market of Australia enjoys bumper growth to $5.4 billion

19 August 2019 Consultancy.asia

The consulting market of Australia has expanded at a positive rate once again in 2018 to hit the $5.4 billion mark on the back of 8 percent growth.

Australia’s consulting market continues to accelerate according to data sourced from industry research firm Source Global Research, topping 2017’s impressive growth rate with an even stronger 8.2 percent expansion in 2018. This sees the top end of the industry push out to a conservative worth of $5.4 billion (Source Global restricts its research to firms with a headcount of greater than 50 consultants), as the most lucrative consulting market per capita worldwide.

The local industry has consistently registered positive growth since 2013 – not incidentally following the return of the Liberal-National government – more than doubling from 2.4 percent growth at the time to 5.3 percent growth in 2015, to now sit well above the national annual growth rate of 2.8 percent for 2018. While growth is expected to slow slightly this year to 7 percent, the government’s re-election is likely to see public spending ramp up again next year.

Australia management consulting industry growth

Alongside the public sector, which accounts for close to 20 percent of the consulting market in Australia and has been growing in line with the overall market rate, and the energy & resources sector (making up another fifth of the market with fresh pressures to reform), is the financial services sector – now commonly the largest spenders in mature markets around the globe, thanks to widespread fintech disruption and the growing international regulatory burden.

The landscape in Australia is no different, with the local financial services sector currently contributing to more than a quarter of the overall domestic consultancy spend (now to the tune of $1.4 billion per annum), growing at a rate of more than 10 percent last year. An additional factor for the increasing demand was last year’s Hayne Royal Commission – a public investigation looking into misconduct in the Banking, Superannuation and Financial Services Industry.

“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 and regulatory framework,” noted Zoe Stumpf, Head of Market Trends at Source Global. “As well as compliance work, this is leading to widespread demand around governance and strengthened risk management approaches.”

Australian consulting market value by sector

Elsewhere, the energy and resources sector – with Australia home to the two biggest mining companies worldwide by market cap – continues to be a cash-cow for consultants, contributing $1.1 billion of the total local spend, while the healthcare sector is the fastest growing, up 13.6 percent in 2018 to $233 million and a 4 percent market share thanks to an ageing population and technological disruption. Meanwhile, technology remains the fastest growing service line.

In terms of digital and public sector work, the Big Four and large tech consulting and services firms such as Accenture have a stranglehold on the market. According to The Australian Financial Review, the Big Four firms earned $1.7 billion from the federal government alone between 2012-13 and 2016-17. Indeed, all of the Big Four have seen their local revenues rocket in recent years, with Deloitte for example recently recording double-digit growth for the fifth consecutive year.

Meanwhile, competing alongside the consulting arms of the Big Four (Deloitte, KPMG, EY and PwC) and likes of Accenture are the traditional top-tier strategy & management firms such as the so-called MBB: McKinsey & Company, BCG, and Bain. Filings from last year show that Boston Consulting Group achieved local revenue growth of over one third and a staggering 130 percent jump in profits. McKinsey, meanwhile, continues to score lucrative contracts.

Ultimately, while Australia’s consulting sector continues to outperform – attributed in part to the nation’s indefatigable economy according to industry leaders interviewed by Source (the country is projected to achieve an unprecedented 30 consecutive years of growth in 2021), the market growth in fact mirrors that of other mature and leading economies around the world, with for example both France and China growing at a rate of 12 percent last year – the latter to soon reach a worth of almost $6 billion


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