After years of strong performance, the Global Management Consultants market has fallen upon hard times. From 2003 to 2006, year-on-year revenue growth was particularly strong. However, in 2009, the situation began to deteriorate as the economies of the United States, Europe and Japan all slid into recession, causing companies to defer or cancel discretionary expenditure, including on management consultants' services. As a result, industry revenue contracted 2.6% in 2009 and fell another 3.5% in 2010.
However, these moderate declines indicate that management consultants have been somewhat insulated from the full effects of the global economic downturn. Asia's rise in the global economy has given management consulting services a large boost via China and India. This growth has helped offset weaker growth from the developed nations that dominate the industry. Consequently, IBISWorld estimates that global industry revenue is growing at a 0.4% average annual rate from 2008 to 2013.
The industry also benefits from some countercyclical demand for services. In good times, companies invest heavily in profit-maximizing activities and rely on consultants to ensure they develop effective strategies to do so. In a downturn, many companies still require consulting advice to mitigate their losses, which creates a base level of demand that the industry can rely on when times are tough. Global industry revenue is expected to increase 4.3% to about $334.7 billion in 2013 due to economic growth in China and emerging economies, along with a slow recovery in developed regions. However, there is still significant uncertainty regarding developed economies' recovery. Recovery in the United States and Europe is anticipated to be gradual and prolonged, and this will also hamper revenue and profit for management consultants in the near term.
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