This follows strong growth in 2010-2011, and Source expects the market size to reach $2bn during the next 12 months.

The report also found the Saudi Arabian consulting market, which grew by 34 per cent to $791m, has now emerged as the largest consulting market in the GCC, eclipsing that of the UAE ($553m). Behind Saudi Arabia, the report says that Qatar is the next most exciting market – growing at 14 per cent to $232m. Being awarded the FIFA 2022 World Cup has put wind in the sails of this small country. Julian Hawkins at Deloitte comments: “Qatar will be a huge market for consulting given the confidence in the economy and their bold planned developments.”

The greatest sector growth across the region is coming from the public sector, which grew by over a third (37 per cent) between 2011 and 2012. However, Source points out that the GCC sector distinctions are inherently difficult to make because so much is owned by governments across the region.

Consulting services that are in greatest demand from GCC companies and public sector organisations is operational improvement work (up 38 per cent), technology (up 33 per cent) and HR consulting (up 28 per cent). The report says that the growth in operational improvement serves as a reminder that even in high-growth markets like the GCC efficiency remains a high priority for clients.

The biggest challenge faced by consulting clients and consultants is a shortage of skills. Edward Haigh, a director of Source and author of the report commented: “The region just doesn’t have enough people with the right skills to keep pace with its ambitious growth plans. It’s a situation which is exacerbated both by nationalisation agendas which, implicitly or explicitly, demand a greater degree of local people in the workforce, and, for consulting firms at least, the difficulties associated with moving people around the region to match demand with supply.”

The big opportunity for consultants in the GCC

Partly driven by a shortage of skills internally, the greatest opportunity for consultants in the GCC lies in implementation. Clients are becoming increasingly reluctant to buy advice in isolation, insisting that consulting firms stick around to turn plans into reality. Luca Rossi, AT Kearney, supports this point in the report by saying: “Clients now realise that good ideas without implementation are worthless.”

Strategy firms continue to rule the roost, but only just

Amongst strategy firms which continue to dominate the GCC market (17 per cent growth to $532m), the Source report says that McKinsey is the firm about which clients are most likely to comment, but they aren’t always positive about the quality of the firm’s work. Booz and BCG are both establishing reputations as strategy firms capable of implementing and other firms, most notably Bain, score much higher than McKinsey, by Source’s measure of client satisfaction.

The report also found that the Big Four firms have performed very well recently with their market size increasing 20 per cent to $495m. This is partly because of the network that their audit practice has given them and, more recently, the breadth of services they offer. KPMG is the Big Four firm which clients are most likely to mention, but it does attract criticism more than its competitors. PwC is the least likely to be mentioned, but comments about the firm are more consistently positive than they are for any other Big Four firm.

Big projects are on the up

The GCC consulting market is also benefiting from an increasing number of bigger projects. The report says that there are still a large number of small, tightly focused projects around, but there are also more big projects and fewer mid-sized projects. All of which points to the idea that it’s not the total number of projects which is growing the market, it’s the number of big projects.

Peter Christie, Hay Group concludes: “More than 50 per cent of our business came from large projects that are more than 4 times the value of our average-size project only two years ago.”

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For more information on Source reports contact [email protected] or telephone +44 (0)20 3178 6445/visit www.sourceforconsulting.com.