If we look back over the performance of the consulting and broader professional services market over the last five years, 2019–22 followed patterns associated with previous downturns. Between the global financial crisis of 2007–9 and the pandemic, global demand for external support grew somewhere between seven and eight percent, and deviations from this pattern were small. The pandemic resulted in a 4% fall in demand for consulting and a 6% contraction in the wider market (which was buffered by the need for new technology). In 2021–22, the market did what it had always done in the past: It grew rapidly, fuelled by pent-up demand left over from the pandemic, alongside a thirst for innovation and high levels of company profitability. That level of growth was always likely to be unsustainable—most client organisations can only cope with so much change—but the subsequent crash was hugely amplified by high energy and other costs resulting from Russia’s invasion of Ukraine and generally low business confidence.  

However, following the downturn in the consulting and professional services markets in 2023–4, demand doesn’t seem to be following old patterns. Something new is going on. Since January this year, we think the world is not so much uncertain as unreliable. So, what’s the difference?  

Imagine you want to go somewhere in London. You have multiple transport choices available to you, but the cheapest and most convenient is one of the big red London buses. They cost very little, go almost everywhere, and have the added bonus of giving a scenic tour. But an urban bus service is inherently uncertain. When you stand at the bus stop (and let’s ignore the handy bus apps Londoners now have), you don’t quite know when the bus will turn up. It might be a few minutes; it could be longer. But there’s little incentive to do anything other than carry on waiting because, while you may be unsure when the bus will come, you can be confident that, eventually, it will. What’s more, the longer you wait, the more likely it is that the bus will arrive soon.  

By contrast, in an unreliable world, there’s a real possibility that the bus won’t come at all. It’s a low-trust environment: Because you can’t rely on something happening, you must assume the worst. And that means that you don’t stand at the bus stop. Instead, you walk further to a more reliable tube station or hail a more expensive taxi. Making the effort or spending the extra money is worth it because if you wait for a bus that never comes, you won’t make it to where you need to go.  

How does all this translate to professional services? If your client thinks the world is uncertain, they’re going to wait and see in what direction the market moves before investing in their business because that’s the most sensible course of action. But if they think the world is unreliable, they’ll be highly motivated to act right now. Why wait, if it’s possible the bus won’t ever come? This chimes with what we’re hearing from clients and from the consulting and professional services firms that work with them: Some businesses are hesitating; others are taking action.  

So, how does this affect demand for external support? 

Our current forecasts for consulting have growth edging up slowly but still falling short of the industry’s historic norms. In an uncertain market, even that low level of growth would be doubtful; pessimistically, growth could be around just 2% in the coming years, down from an existing projection of 6%. But if clients start to feel, as we do, that the market is less uncertain and more unreliable, we could be looking at a rapid jump in activity supporting them in planning and implementing significant changes to their business and operating models. This might lead to gentle growth in the short term as clients begin contingency planning internally. Following this, we could see a spike in consulting spend in 2026, even approaching double-digit growth, as clients invest in external support to help them shore up their businesses against future threats. Growth may then dip in 2027 as the world for many of these clients begins to become more reliable thanks to the actions they have taken.

The challenge for consulting and professional services firms will be how to ensure they have the capacity, expertise, and speed to meet the needs of clients who want to act now, while ensuring that their resourcing model can cope with much slower-moving, uncertain clients. 

The performance of the global consulting market

What can firms do next?
If you want to understand how shifting macroeconomic forces could impact your unique client base—and what that means for your firm—get in touch to find out how Source can help you anticipate future scenarios and plan with confidence.