Business consulting firm NCC Group has released its latest forecast for 2018, predicting that a significant number of clients will need to cut back on their spending over the coming six months.
The report, released to BusinessDay this morning, shows the industry is seeing a drop in demand for services in 2018, with a majority of clients now being focused on other business types such as sales, marketing and administrative.
As well as this, NCC says the average annual spend on client services has also fallen by 10 per cent.
“This has been driven by an increasing proportion of clients opting for a more traditional business model, and the impact of the GST and other taxes,” the report’s author said.
This trend has been a boon for NCC, which saw its revenue drop by $1.8 billion to $3.3 billion in 2017, which is the biggest drop since 2012.
It’s also not the first time the company has forecasted a downturn for the industry.
In January 2016, NCD forecasted that the business consulting industry would see a 15 per cent drop in revenue in 2019, and predicted the industry would shrink by 9 per cent over the next three years.
While the downturn has now subsided, NCE’s forecasts have been quite bullish, with NCC forecasting the sector to grow by more than 25 per cent in 2019.
With this year’s downturn largely being driven by the GST, NCP’s latest forecast is quite prescient, given the company’s forecasted revenue growth over the year will be $1 billion.
NCC predicts that the next 18 months will see a similar trend, with business consulting revenue growth continuing to accelerate.
For 2017, NCCC expects that the industry will grow by $400 million to $2.4 billion, and that it will reach $4.2 billion in 2019-20.
Overall, NCA’s forecast for 2019-2020 is for business consulting to grow at an average annual rate of 25 per 100,000 business participants.
If you’re looking to cut your costs and expand your business into new areas, the next 6 months can be quite a ride.
Business consulting firm New Century Consulting, which was formed by NCC’s CEO Michael Worsley, is now providing clients with business services in six areas of the business: sales, finance, marketing, HR, IT and supply chain.
Read moreNCC also released its 2018 results for business consultants, which showed a drop of more than 50 per cent from the year before.
Of the $1 million that the company collected from the business consultancy market in 2018 (the last year for which data is available), the company saw revenue drop $3 million to just over $1,000,000.
Its business consultants revenue has also declined by almost 40 per cent since 2012, which has seen NCC seeing its total revenue decrease by more that $2 million.