Management consulting market of GCC grows 9% to $2.7 billion

23 November 2016 4 min. read

As consulting services continue to gain popularity in the Gulf Cooperation Council (GCC) region, the management consulting market is reflecting this momentum, having grown by more than 9% last year.
Member countries of the GCC region, including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE) have all faced a tough year. Predominantly made up of oil-based economies, falling oil prices across the globe caused a significant blow to revenues in the region. However, one area in which the market continues to grow steadily is the consulting industry.
According to data from Source Global Research, the consulting market of the GCC region grew by 9.4% last year, reaching a value of $2.7 billion. Quite predictably, a majority of the business in the region went to the Big Four professional sevices firms, which have all been ramping up operations in the region. These firms, which include Deloitte, EY, KPMG and PwC, collectively accounted for 34% of the business in the region, generating revenues of approximately $913 million.
However, while this growth is impressive in a slowing economy, and comparatively better than the global market, it is not remotely the best recorded figure in the region. In 2013, the GCC consulting market grew by a staggering 25%, and grew by another 15% the following year in 2014. The relatively low growth rate can be attributed to the slump in oil revenues.

Saudi Arabian consulting market

The most prominent consulting market in the GCC region is that of Saudi Arabia, which comprises nearly half of the revenues for the entire region. The Saudi Arabian consulting industry alone is valued at $1.25 billion. The main source of business for consulting firms in Saudi Arabia lies in the public domain, primarily in the form of assistance for developmental projects. The country is currently executing its ‘Vision 2030’ strategy,’ which aims at bringing local firms up to global standards, making Saudi Arabia the hub for global  industry.

Size of the GCC consulting industryAs a result, the public sector has been hiring some of the world’s leading consulting firms to help with development projects, with the aim of reducing the economy’s reliance on oil. These include leading management consulting firms such as McKinsey & Company, The Boston Consulting Group (BCG), A.T. Kearney, Oliver Wyman and Strategy&. A majority of these firms have been upscaling their operations in the region recently through the opening of new offices.
The demand for consulting services in the public sector is not limited to Saudi Arabia. Other countries in the GCC have also begun warming to the idea of hiring external help for developmental projects. One example of this is Qatar, which has a ‘Vision 2030’ of its own, with a focus on infrastructure projects. As a result, public sector expenditure on consultants in the GCC region grew to $856 million last year, nearly 12% higher than the previous year.  The segment has outgrown the region’s fastest growing segments, including the helathcare, pharmaceutical and biotech industries, which are cumulatively valued at $174 million.
Nevertheless, the continuing drop in oil prices raises the question of whether this public spending will maintain its current levels. Governments in the region are increasingly under pressure to curb expenditure where possible.

Other GCC advisory markets

The UAE follows Saudi Arabia in second place in terms of consulting market size, having grown by 4.3% last year to $788 million. Qatar is the third largest, with revenues in the consulting industry growing by 6.6% to reach $329 million. This was followed by Kuwait, growing by 3.7% to $183 million, and Oman, growing by 6.9% to $100 million.  
Within the consulting market, technological services registered the highest growth rate in the region, growing by 12.2% and reaching a value of $895 million, whereas operational improvements increased by 12% to $534 million.
At a global level, the US leads the world’s consulting markets, valued at $55 billion, followed by the DACH region and the UK.
* The criterion used by Source Global Research to include a consulting firm in its analysis is at least 50 consultants, working for mid or large-sized clients. As a result, the estimates are smaller than one would obtain upon counting small and boutique firms.