MCA predicts bright UK outlook

The British economy will see significant improvements over the next six months, according to the Management Consultancies Association’s Quarterly Survey of the UK’s leading management consultancies. Confidence in the economic outlook for the UK and in the Government’s handling of the economy is at its highest level since January 1998. This marks the first improvement in economic confidence among management consultancies since October 1997.

The survey is based upon submissions by the UK’s leading consulting firms.

It shows that MCA member firms’ confidence in their clients’ business prospects has increased for the first time quarter-on-quarter since 1997.

Consulting firms’ confidence in their own prospects has increased for the first time since the beginning of 1998.

While the proportion of consultancies reporting an upwards trend in the volume of new orders has fallen over the last quarter, this is offset by strong growth in the average fee rates during the same period. The overall picture is one of quiet optimism. Some 87 per cent of firms report an upward trend in the number of consultants employed, an increase of 10 per cent on the previous quarter.

Despite a small fall in revenues (0.9 percent), due largely to the seasonal nature of major IT projects, the consultancy industry recorded a combined income of £1.4bn for the first quarter of 1999. Facilities management services experienced a rise of 1.3 percent, to reach just over £300m in the same period. Consultancy service revenues remained level at £700m.

The survey reveals major improvement in confidence in four sectors: overseas markets, transport & communications, manufacturing and construction & property. There is a small rise in confidence in financial services, while distribution, hotels & catering remains level. However, confidence fell in primary industries and the public sector.

Mike Freedman, president of the MCA, said: “Confidence in the Government’s economic performance is down from its high-point at the end of 1997, but the trend is now pointing upwards.”