First signs that largest market for consulting is bouncing back

Although spend on management consulting has decreased significantly across major buyers in the first half of 2009, the new sourceforconsulting.com Quarterly Trends in Consultancy Buying report released today shows that financial services, which collectively represents almost a quarter of the UK market, is showing the first signs of increasing its investment in consulting services.

The report found that while spend in the average major consultancy-buying organisation decreased by more than 25 per cent in the last six months, a significant proportion of financial services companies said consulting spend had increased; some by 50 per cent or more.

IT spending on the rise...

Systems integration work is also ending its downward trajectory and growth is returning. It is predicted that this growth is being fuelled by a resurgent banking sector.

Fiona Czerniawska, Director of sourceforconsulting.com commented: “The financial services sector will be the key driver in the recovery of the management consulting industry. A return of confidence to the sector has seen a new wave of consulting projects. In particular, the banking sector is investing in IT and systems integration work.

“Despite these more positive signs, the market as a whole remains weak. Consulting firms are continuing to discount their fees and are increasingly working with their clients on a risk and reward basis.”

The future - more evidence of a return to spending from financial services

The sourceforconsulting.com report also asked major consultancy buyers how they expected their consulting spend to change over the next six months. It found that almost two thirds (57 per cent) expect ‘no change’ or ‘spend to increase’, whilst 43 per cent expect to spend less.

These figures conceal more positive news from financial services. The number of companies within the financial services sector expecting an increase in spend of more than 50 per cent is double the figure for non-financial services organisations. This reinforces a similar message from the Management Consultancies Association, whose recently released survey of consulting activity in the first half of 2009, also showed signs that demand for consulting in the financial services sector is recovering.