Slowing growth in Germany, Switzerland and Austria

Anyone who has been on an aircraft has had that unsettling feeling when, thirty seconds-or-so after take off, the plane suddenly feels as though it's about to stop. "We're stopping!" you think. "Why are we stopping? Stopping isn't a good thing now that us and the ground have parted company! Captain! Captain! Put your foot down, or whatever you do in an aircraft!"

What's happening, of course, is that you're decelerating. You're not stopping, you're not even slowing down, but the rate at which you're speeding up has decreased, and that makes it feel as though you're coming to a juddering halt.

That's pretty much what's going on in the German, Swiss and Austrian (GSA) consulting market. It's not contracting, it's not slowing down, but the rate at which it's speeding up has decreased, and that's likely to feel a bit worrying to consulting firms.

Between 2010 and 2011 the German consulting market was growing at about eight per cent, while the Swiss and Austrian market (in truth mainly the Swiss, but we didn't separate the data) was growing at more like 15 per cent. Research for our latest report - being launched in Frankfurt today - finds that between 2011 and 2012 growth in Germany was a little less than five per cent, and in Switzerland and Austria it was even less than that.

Let's put this in context for a minute: this is hardly a crisis. French consultants would love their market to be growing by five per cent. So would UK consultants. For anyone in Southern Europe and Benelux, five per cent is beyond their wildest dreams right now. Nevertheless, it probably feels quite painful for GSA consulting firms.

In part, that's because there hasn't been a crisis in the GSA market leading to a correction in the volume of supply, as there has elsewhere. To shift the analogy, the watering hole from which GSA consultants have been drinking has been allowed to become quite crowded, because there's been little sense that it's about to dry up. That confidence is based on some solid foundations, as we discuss in our report: GSA clients are considerably more comfortable than their counterparts elsewhere with the idea of increasing their spend on consulting, and there's little to sugges that the GSA consulting market is staring down the barrel of a crisis. But the truth is that the rate at which the watering hole is being replenished has slowed, and those vying for their space at the water's edge are eyeing eachother a litte more nervously than they were previously.

Sooner or later, there's going to be a fight.