Biggest consulting sector turns corner
The sharp slide in the financial services sector over the last three years has bottomed out with a slight rise in fortunes, according to the latest sector survey by Management Consultancy.
Link:Public sector increases spend on consultants
The overall gain of 3.4% may not be as high a figure as the industry would like to see but it is an encouraging sign of growth after two consecutive years of declining fee income from the sector.
Financial services is the largest market for consultancy. Although firms are set to earn £40m more in this market in 2004 than in 2003, when spread across the industry it will not amount to a great deal.
Management Consultancy discovered that very few firms, particularly smaller players, expected fee income to rise by more than 5% from any of the major financial sector markets.
Over the last two years prices have come tumbling down. The survey asked firms the average daily charge-out rate for different categories of staff and found that rates were back to where they were four years ago.
The average day rate for junior consultants or recent graduates in 1999 was around £700. Two years later the figure was more than £1,100. The figure for 2003 is back to the 1999 level.
Partners and directors have also seen a decline in fees. The average day rate charged in 2001 for a project manager, one of the most senior members of a consultancy team, was £2,225. The 2003 figure stands at only £1,995.
Over half of 2003 fee income from financial services was found to come from IT.
At 51.5% this was more than any other market sector and exceeded the share of the total fee income of the top 75 consulting firms in 2003.
There was a dip in the number of projects in the sector, also due to a squeeze in prices.
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