COVID-19 | Update for 1 May 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: 1st May

Although our forecast of the impact of the COVID-19 crisis on the consulting industry for 2020 as a whole stubbornly hovers around the -19%/-20% mark, there’s a small but growing sense of optimism among consulting firms that the final number may turn out to be not quite as bad as expected. No chickens should be counted, though: The last week also saw some areas, notably Central & South America, and the banking sector getting worse. Furthermore, expenditure on consulting services in the public sector may be providing a false sense of security.

Small steps up

North America accounts for around half of the entire global consulting market and is therefore a good place to start our weekly update. The good news is that the situation in this market appears reasonably stable—it’s improved fractionally from -19% last week to -18% this week. Inevitably, many projects that started in the pre-COVID-19 world are now reaching their planned conclusions, but larger firms have been pleasantly surprised that their pipelines, although much thinner than they would like, are still yielding sales—sometimes sizeable ones. Inertia combined with long-term planning clearly plays a role in decisions to go ahead with projects, but this also reflects clients who are starting to be able to think about how they manage over the next six to nine months, during what’s likely to be a prolonged period of uncertainty.

The forecast for the Middle East consulting market also improved somewhat: Despite the low oil price and articles in the media about consulting projects being cancelled, firms with a strong technology footprint and/or well-established client relationships are still seeing opportunities.

Small gains in both these markets were, however, partially offset by a deteriorating picture in Central & South America, where we now think the consulting market could shrink by 24%, a substantial drop that reflects the escalation of the crisis in that region. This is, however, a relatively small market, accounting for just 3% of the global total, so the overall impact on our numbers is minimal.

  Region 2019 (US$bn) 2020 forecast (US$bn) % change
North America 78.7 64.2 (18%)
Europe & Russia 43.2 33.6 (22%)
Asia Pacific 24.8 20.7 (16%)
Central & South America 5.1 3.9 (24%)
Middle East 3.6 2.8 (24%)
Africa 2.9 2.6 (11%)
  Total 158.4 127.8 (19%)

More material were the ups and downs we’ve observed in various key sectors.

The world’s banks generate more consulting demand than any other sector—around $17.5bn in 2019, or 11% of the total—and successive waves of regulation virtually guaranteed steady growth in consulting expenditure. Even before the current crisis, that was a double-edged sword: Consulting growth rates in the sector fell substantially last year, largely as a result of clients pushing down rates for what they increasingly regarded as commoditised work. As the crisis has unfolded, banks have found themselves at the forefront of helping governments execute a wide range of fiscal stimulus programmes and have turned to consulting firms for help—much as they did during the global financial crisis 12 years ago. That has already boosted some parts of the consulting industry, notably the Big Four firms, but it also means that money that could be spent on other areas—helping banks transition more effectively to remote working and, more generally, digital transformation—is once again limited. This will not only depress current expenditure levels in the sector but potentially casts a prolonged shadow over banks’ ability to invest going forwards. A short-term gain could become a long-term pain and that’s reflected in our numbers, with the financial services sector now expected to shrink by 13%.

  Sector 2020 forecast
% change
Energy & resources (31%)
Financial services (13%)
Healthcare (25%)
Manufacturing (25%)
Pharma (3%)
Public sector (16%)
Retail (18%)
Services (32%)
Technology, media & telecoms (8%)
  Total (19%)

Technology companies, who may lose out in the banking sector, may be able to take comfort from improving fortunes in the TMT market, where evidence of new projects has lifted our predictions for the high-tech sector to +5% (one of the few markets to see positive growth) and just a 4% contraction in the telecoms space. The consulting market in the media sector continues to be grim, with a fall in excess of 45% predicted globally.

We also see improved prospects in the public sector, which is now predicted to shrink by a more modest 16%. Like banking, the key here has been the almost instantaneous impact of government initiatives, many of which are on a scale that no standing civil service could hope to deliver without external support. Like banking too, this is nothing new: Past economic crises have almost always seen public sector spending on consulting services grow. Indeed, we were struck this week by the positive correlation, in the feedback we’ve received from consulting firms, between the likelihood of them describing the market in terms of “no change” or “improved slightly” and the extent to which they work in the public sector.

We envisage several problems with this trend, however welcome it is for the moment. Different governments have very different views around the acceptability or otherwise of using consultants. Despite a decade of attempts to reduce it, the use of consultants in the UK public sector has remained relatively high. The Nordic region has seen more recent attempts to reduce its consulting bill, but there’s less pressure to do so in France, where consultants tend to play a more modest role in the public sector. None of these cultural predispositions are likely to disappear in the crisis: If anything, we think they’ll be amplified. Consulting fee rates are typically lower in the public sector than the private sector, and it’s not implausible that this work is being done at lower-than-normal rates because consulting firms will wisely want to avoid accusations of cashing in on the crisis. Some of it may even be being done for free. Even with these precautions there’s a danger that public sector managers begin to resent the presence of consultants, ultimately triggering a backlash that will, at best, lower fee rates further and, at worst, significantly reduce future demand.

This future is not, of course, set in concrete: Consulting firms working in the public sector have a unique opportunity to demonstrate their ability to add measurable value, by designing better solutions, and implementing them more quickly, than public sector organisations can by themselves. The failure to do that could lead to lasting reputational damage: The COVID-19 crisis has made public sector consulting a very high-stakes business.

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 work, 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.