BrazilGerman management consultants positive on 2020 outlook
After months of a decline in confidence, German management consultants have – despite the country’s mixed economic outlook – started the year with a full bag of optimism.
“Management consulting firms in Germany are confident about the outlook in 2020,” said Ralf Strehlau, President of BDU, Germany’s association for consulting firms.
Every quarter, BDU sends out a poll to its member base, spanning large, mid-sized and boutique consulting firms. According to Strehlau, the average score (based on an index) has in the first quarter of this year reached its highest point in the past three years.
The development is noteworthy against the backdrop of Germany’s mixed economic outlook. In its analysis for 2020, Munich-based research institution the Ifo Institute described the economy as “splintered”.
While the performance of domestically oriented companies is set to improve, a number of major industries to its economy – including the powerhouse automotive – are finding themselves sliding into recession mode. In the case of Germany’s iconic car manufacturing sector, players are being hit hard by mounting trade tensions and import tariffs.
For the overall economy, the ifo Institute forecasts a 1.1% growth trend for the German economy in 2020, and 1.5% growth in 2021. Demand for strategy, management and digital consulting services is however expected to outpace German businesses.
In BDU’s survey, the majority of consultants said that they expect the consulting industry to grow (markedly) stronger than the economy. In particular mid-sized consultancies paint themselves a positive picture for the coming twelve months.
According to the survey, most consulting segments will see growth in 2020, including strategic services, restructuring, financial advisory, outplacement and digitisation. This is in turn sparking the recruitment team of consultancies to place more focus on attracting talent for expanding project portfolios.
The value of Germany's management consulting industry is estimated to be around €36 billion.
