Each year, the Management Consultancies Association (MCA), with the help of their member firms, collates their Annual Industry Report. This year’s report highlighted some interesting trends fuelled by financial and political uncertainty and upheaval. Our Planning Director, Julian Horberry, gives his take on the highlights.

One of the most striking aspects of this report is the influence the Brexit vote has had on the consultancy sector, and the repercussions this has for UK plc. Since the vote last year, it’s been a turbulent and uncertain time for businesses at large, hitting confidence hard. They’re becoming much more cautious, and the impact of this on investment in consulting services is clear throughout the report.

Over recent years, growth in the consulting sector has significantly outperformed the wider economy, however recently, this has started to slow. MCA member growth has become more modest in over the past few years, in 2016 comparable growth of MCA firms was 4.76%, the lowest figure for the industry since 2011.

Many businesses looking for consulting expertise are waiting for more clarity before they commit to making vital business decisions or large investments. It’s understandable that businesses feel more precautious in the wake of the Brexit vote, when the terms are still so uncertain, but surely, a time such of this is when businesses need the help, guidance and knowledge of consultants the most.

The financial and business climate is very uncertain in the UK at the moment, understandably so, following the largely unexpected outcome of the Brexit vote and the political chaos which has followed it. Months on, we still don’t have clarity on the terms of our exit from the EU, and the prospect of a so called ‘hard Brexit’ keeps getting more and more likely.

Although it’s common for businesses to be more cautious and cut costs which they don’t deem to be absolutely necessary during periods of uncertainty, what businesses need to realise is that it’s in these times that they need impartial expert help the most. Businesses need to ensure they’re resilient and can weather these difficult times, something consultancies are well versed in.

The report demonstrates consultants’ vital role in the wider economy, MCA Chief Executive, Alan Leaman said: “Consulting is at the heart of an extremely important feature of modern capitalism. Value and supply chains in everything from automotive, infrastructure, energy and digital are global. A UK SME may provide components for German cars or a technical innovation for a French bank. Management consultants are critical to these value chains. They integrate them and provide specialised advice and support on everything from digital to the management of complex infrastructure projects to many firms working in the global contexts that are vital to the UK’s export success. Our industry needs open markets to continue to provide this value.

The relative slowdown of consulting in the UK is reminiscent of the 2008 financial crisis. Unlike many firms, Propaganda was relatively untouched in terms of downturn, and the clients that maintained investment over that time, are reaping the benefits to this day. A case in point is the brand that we created at that very time, Illamasqua.

Launching a global makeup brand in the face of a worldwide recession might seem like a questionable decision for some, but our strategic base and insight, allowed us to develop something truly unique, and disrupt the market. It has also helped us to give our clients confidence in the power of consulting, especially if your business has the agility to move with the times. It comes down to a phrase we use often; it’s better to out-think, rather than out-spend, your competitors, and SMEs often have this distinct advantage over the corporate behemoths.

Brexit is bound to be a challenging time for businesses, not only due to the uncertainty, but a whole range of factors, but it’s important to remember that without taking certain measures and simply standing still, businesses could be putting themselves even more at risk.