GCC consulting market pushes to $3.3 billion with 10 percent growth

The consulting market of the GCC has achieved growth of close to double digits in 2019, with the largest firms collectively pulling in revenues of $3.3 billion for the year.

The upper end of the GCC consulting market last year grew to a worth of $3.3 billion, with growth only fractionally shy of double digits (9.9 percent). This is according to the latest data from specialist professional services sector analysis and advisory firm Source Global Research, which at the time of publication expected further region-wide growth in demand through to the end of this year – although for now the impact of the coronavirus pandemic remains unclear.

For its research, Source Global confines its analysis to mid-tier and large consultancies with a headcount of greater than 50, and the work they have carried out for mid and large-sized clients in turn – what the firm terms as ‘big consulting’. While baseline data is often adjusted retrospectively, last year this upper echelon of consulting firms experienced accelerated growth, after having broken the $3 billion barrier in 2018 on the back of a 9 percent rise.

The figures represent the third consecutive year of increased growth for the regional consulting industry after the dramatic oil slump in 2015 put a serious dent in the market, with much of that growth driven by demand from the government and public sector (up 10.2 per last year to surpass the $1 billion mark for the first time) seeking to diversify away from a former reliance on resources. In essence then, the previous slump precipitated the accelerated growth of today.

According to Source Global (which conducts comprehensive surveys among leading consulting industry executives and their clients in order to compile its reports), there is currently a wide array of consultancy work on offer in the region due to the differing stages of the various transformation projects being undertaken across the states of the GCC – “from blank-page strategy development through to implementation of those strategies and support for quick wins.”    

In addition, it says, earlier transformation work is now spawning new strategic activity as local governments chart their next move. This is in particular the case in what is by far the region’s largest consulting market of Saudi Arabia, which last year grew to a worth of $1.6 billion on the back of impressive 12 percent growth. However, in addition to the corona fall-out, the local pipeline could be impacted by the government’s planned restrictions on foreign consultancies.

Elsewhere, the financial services consulting segment also performed well over the past year, with ongoing sector disruption and the ever-growing regulatory landscape helping to push revenues up by 9.3 percent to a total of around $700 million, while the tech segment last year grew by 10.7 percent to $1.2 billion – driven by widespread digital transformations across industries, along with increased data and analytics requirements and the need for support with cloud migrations.

Still, at present all eyes are on COVID-19. “In the first instance, some clients will stop existing projects, especially where they involve consultants working extensively in the clients’ office,” commented Source Global’s head of market trends Zoë Stumpf, who noted that some sectors and geographies would be hit worse than others. “Strategy work, because so much of the work can be done at a consulting firm’s office or even from the home, may be less impacted by this.”