COVID-19 | Update for 27 March 2020

We're all facing unprecedented challenges in the next few weeks and months, in our daily lives, in our communities, and in our businesses. But we're already seeing evidence of how, if we work together, we can make a difference.

It's in that spirit of collaboration that Source has put together an estimate of the impact we think COVID-19 will have on the global consulting industry during the course of 2020. We're very grateful for the input of a wide range of firms from around the world who've helped us do this, providing up-to-the minute information on how we should adjust our existing model of the industry.

While based on the best information we have at the time of writing, our forecast and commentary are intended to be directional, providing guidance for future planning. In an environment where everything is changing very quickly, our predictions will inevitably change. Over the coming months, we will be updating the forecast on a weekly basis. For more information on our data and methodology, please see the end of this bulletin.

Please help us to help you: We've only been able to pull this forecast together so quickly because of the input of the hundreds of firms from all over the world who responded to our initial survey. Please help us by sending us your updates week by week, by following this survey link. Every single one of these responses helps us improve our forecasting.

Summary: 27th March

We estimate that COVID-19 virus could reduce the size of the consulting industry by 20%, from $160bn in 2019 to $129bn in 2020, slightly worse than we were forecasting last week. However, despite a deteriorating picture in the US and already severely compromised pipelines, demand for technology consulting is holding up relatively well.

In this, our second week, our forecast of the impact COVID-19 is likely to have on the consulting industry has worsened slightly. We're currently predicting that the consulting market will shrink by 20%, a slip of one percentage point from last week. This isn't unexpected: At the time of writing, we're expecting this crisis to be U-shaped, a steep decline in the early stages, before the situation bottoms out in Q3 and begins to improve during Q4. Please note that we're currently assuming that there will be no second wave of COVID-19 infections.

  Region 2019 (US$bn) 2020 forecast (US$bn) % change
North America 78.7 65.5 (17%)
Europe & Russia 45.0 32.4 (28%)
Asia Pacific 24.8 21.7 (13%)
Central & South America 5.1 4.1 (20%)
Middle East 3.6 2.8 (22%)
Africa 2.9 2.5 (15%)
  Total 160.2 128.9 (20%)

There are several reasons for the slight downgrading of the forecast. Firstly, more firms told us of projects that have been cancelled outright, although this remains a small part of the total—between 2% and 5% on average, depending on the service line, with most being deferred as clients grapple with more immediate problems. Secondly, the feedback that we've received from US firms has been increasingly negative. As the virus becomes more prevalent in the US and as economic activity slows, it was inevitable that the disparity in predictions for the US and Europe would start to narrow. But the most important change we've made reflects greater pessimism about firms' ability to win new work in the current environment, which was a recurring theme in the comments sent in by consulting firms this week. The problem is especially acute in those parts of the world, such as the Middle East, where physically meeting clients is an important part of relationship-building, There is hope that the clients in the US market, so crucial because of its size, will prove to be more adaptable in the coming weeks and months.

These changes are broadly reflected in our new predictions by service line and sector, but there are specific points worth highlighting. Feedback continues to suggest that demand for technology consulting remains relatively strong. Clients need help moving to a more virtual working environment and are increasingly challenging assumptions about how they work. The result is likely to be a rapid acceleration of process and organisational change and it's not impossible that this will translate into long-term changes around how consulting firms think about productivity improvement. For the moment, though, the direct impact is to protect spend on technology consulting. Our latest estimate suggests that demand for technology consulting will only shrink by 7% during the course of 2020.

Concern about the longer-term impact of low oil prices on consulting demand means that we think the energy & resources sector could shrink by 29%, which is worse than we were predicting last week. By contrast, demand for remote working means that high-tech companies are very busy so our forecast here has improved. We expect the technology, media & telecoms sector as a whole to shrink by a relatively modest 13%. It's quite clear from the feedback we're gathering that the healthcare sector has had a hard and immediate hit, certainly in Europe (we've heard, for example, that the UK's National Health Service has ordered all digital transformation projects to be paused or cancelled). Overall, we think this market may shrink by 33% this year. However, countries with an integrated national healthcare structure will be better placed to reconfigure their immense resources, but those with a more fragmented approach may require external help even in managing the immediate, operational response to the crisis. This will be a critical point in the US consulting market because of the size of the healthcare sector.

  Sector 2020 forecast
% change
Energy & resources (29%)
Financial services (12%)
Healthcare (33%)
Manufacturing (22%)
Pharma (6%)
Public sector (23%)
Retail (11%)
Services (30%)
Technology, media & telecoms (13%)
  Total (20%)

This raises an important, more general, point about what happens next in such situations. As we noted last week, most client organisations are currently focused on adapting to their new circumstances, whether that means mothballing significant parts of their infrastructure (airlines and the leisure industry) or responding to unprecedented levels of demand (food retailing and high-tech). Their planning horizons have been measured in days and their first response has been to use their own staff to help work out what to do because fast decisions will depend on detailed knowledge of their business. There's no time to brief outsiders. But at some point organisations will start trying to work out how to plan for the weeks and months ahead, adapting to the temporary new normal, and our hypothesis is that they will turn to consultants for help because much of their internal resources will still be focused on day-to-day issues.

What they won't want, we suspect, is a traditional consulting process—data-gathering, analysis, recommendations—but immediate, hands-on support from people who really know what they're talking about. Taking supply chain management as an example, it's clear that many supply chains are buckling under the difficulty of sourcing raw materials, spare parts, etc. At some point, manufacturers and retailers are going to need to think about how they reconfigure their operations. Rather than asking consultants to do a conventional study, it's possible that they'll turn to consulting firms for additional capacity, an expert version of staff augmentation, in effect. In some cases, this might go further. It's not impossible that governments, many of which have announced whole swathes of unprecedented initiatives with—understandably—little opportunity to think through the operational ideas will decide to outsource the execution to a third party. Conventional outsourcers may lack the depth of expertise required however, so could end up collaborating with consulting firms. For the moment it's simply too early to tell, but it's something we'll be watching for over the coming weeks.

Further questions

We've included details of our model and forecasting methodology below. If you'd like to know more about how we've created our forecasts or want to understand how the year is likely to play out at a more granular level for your firm, please contact


In order to calculate this forecast, we've taken the most recent forecast from our model of the consulting industry, which was prepared pre-crisis, in early January 2020. This unique model is built bottom-up, by estimating the number of people employed by several thousand major and mid-sized firms across 84 countries, 29 industries, and a range of services. We then apply a series of metrics and adjustments around the revenue per consultant. Where possible we validate this data against published sources and interviews with senior people in the firms concerned. Although some of our 10 million individual data points and assumptions may be wrong, when aggregated, they provide a robust view of consulting markets around the world. Moreover, because of the way this model has been built, we can adapt it to take account of new scenarios—as we have done here. In order to understand the likely impact of COVID-19 on the consulting industry, we've developed forecasts at the level of individual service lines, quarter by quarter, then modified these depending on industry and country. Please note that all the data in this bulletin is for the calendar year 2020 and is in US dollars. We've calibrated our assumptions with a number of major and mid-sized firms.


One of the greatest challenges with sizing any part of the consulting industry is that “consulting” means different things to different people. Over the last 12 years, Source has adopted a consistent definition, and this underpins all our published material about the consulting industry. It includes traditional management consulting services (strategy, HR & change, operational improvement, risk & regulatory, and technology consulting), but does not include systems development and integration, and outsourcing services.


Our model also focuses on what we call "big consulting", work done by consulting firms with more than 50 consultants typically for clients with a turnover in excess of $500m.

About Source Global Research

Source Global Research is the leading provider of research about the professional services market. Founded in 2007, we serve the world's leading professional services firms and their clients with expert analysis, data, and insights. Firms come to us because they know we offer transparency in a notoriously opaque market. We provide direction and evidence about changes in the marketplace, helping firms cut through what can sometimes be intractable discussions around future direction by being objective and honest.

Data sits at the heart of what we do, and our model of the professional services market is the largest and most sophisticated in the world. Data in the model comes from extensive desk research, and interviews with over a thousand senior partners from around the world. It feeds into our customers' business strategies and helps them prepare for the future. We also place a strong emphasis on the views of clients of professional services firms (we conduct some of the largest interviews on this sector in the world) and listen to what clients need, and how their views are changing in the marketplace.

Please note that, because we work with such a wide range of firms, we take confidentiality very seriously. Our ongoing research programme, including interviews, and customised project work with individual firms, gives us an extensive foundation of knowledge and allows us to work on some of the most confidential issues these firms have.

Our independence and knowledge of the professional services industry means that we're trusted to set our work within the wider market context, helping firms make the most of the opportunities on offer. Our customers would tell you that we have a strong commitment to doing the very best for every firm we work with, and are thoughtful, friendly, and easy to work with.

Please help us to help you: We've only been able to pull this forecast together so quickly because of the input of the hundreds of firms from all over the world who responded to our initial survey. Please help us by sending us your updates week by week, by following this survey link. Every single one of these responses helps us improve our forecasting.