A return to the days of double digit growth in the strategy consulting market are a long way off with the possibility consultants may not see significant fee income growth before the turn of the decade, according to the latest Management Consultancy survey.
Despite fee income from corporate strategy work expected to rise for a second consecutive year in 2005, the good news for both the dedicated strategy houses and the consulting firms is set to be shortlived as the overall gain will be less than 6%, the study revealed.
In cash terms, with 2004’s corporate strategy fees estimated at £530m this means that fee income will still be below 2001 levels (£571m) and significantly below the £588m high-point of 2000.
Financial services was found to be the dominant market in the strategy consulting sector with a 23% share and an estimated 2004 fee income at £121.9m.
Retail followed with a share of 12% and almost half FS’s total fee income of £63.6m, while encouragingly, the survey revealed that the generally declining manufacturing sector had a 10% share in 2004 and was the third largest UK market with fee income levels of £53m.
Expected fee income levels for 2005, however, were slightly more positive.
Financial services within the strategy market is expected to increase by 7% to £130m but the big winner is set to be strategic work within the NHS with an estimated 8% rise to £57.2m. Central government came in third place with an estimated 5% increase and an expected fee income level of £50m.
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