Downturn in Diversified Consulting Market during Q2 2023
STOCKHOLM, Sept. 19, 2023 /PRNewswire/ -- The growth of consulting firms has significantly decelerated during the second quarter. On average, growth was at 8.5 percent, which is lower than inflation. This is in contrast to 15 percent just a quarter ago. The operating margin has also dropped considerably. This is according to Cinode's compilation of the Q2 reports from publicly traded consulting firms
"The consulting industry's slowdown is now reflected in the companies' numbers. However, what we see is not a complete picture, but a very differentiated market. IT-heavy companies, which previously had strong tailwinds, have had it much tougher. Real estate, retail, and HR have also faced significant challenges," says Mattias Loxi, co-founder of Cinode, the leading platform for consulting companies.
Despite these challenges, some companies and sectors continue to show strength.
"Cybersecurity/defense, industry, and energy have performed very well. Also, public investments in, for example, infrastructure remain at a stable level," points out Mattias.
Gofore, CombinedX, Innofactor, and Sweco show the strongest growth. A fifth of the companies have reduced revenue compared to last year, even though prices have increased.
"Another reason for the slowed growth among these consulting firms is that there have been significantly fewer acquisitions recently."
Three-quarters of the companies have lower margins compared to the previous year. Exsitec, Gofore, and CAG Group have the highest margins.
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