Three of the unscientific, but often reliable barometers of the state of the economy appear to be suggesting things are on the up and the UK recession could be over.
Firstly, the London-based intermediary’s National Mortgage Index showed current conditions have done little to slow demand, with mortgage applications up 98.1 per cent compared to December 2011, and up 5 per cent compared to March 2011. Secondly, management consulting firm, Price Waterhouse Cooper (PWC), forecasts for hotel occupancy suggest there has been an increase in occupancy levels for 2012; occupancy rates are up on those for 2011 which are also up on the 2010 rates.
Finally, the Management Consultancies Association (MCA) has reported that management consultants saw their fee income return to pre-crisis levels last year, rising by just under 5 per cent to a total of almost £9bn.
The truth is there is such conflicting data that makes it difficult to reach any sensible conclusion. Some sectors appear to be doing well whilst others are struggling. This has not been a one-size fits all UK recession. This can be seen from MCA’s own data on the consulting sector.
MCA argues that since 2009, a recovery in the private sector has outweighed a big drop in public sector work. They report that public sector fee income fell by 19 per cent last year, after an 11 per cent drop in 2010, but that private sector income was up by 14 per cent on top of a 12 per cent rise the previous year. It reports the ratio of private to public work is now 80:20.
The MCA also forecasts a 4-5 per cent growth in 2012, but says that the sluggish economy could have an impact if clients become reluctant to invest in projects that build their capacity to respond to a delayed upturn.
Alan Leaman, the MCA’s chief executive, said: “The UK consulting industry is both resilient and agile. It looks likely that the increased spending on consultancy services in 2011 by the private sector was an early sign of some improvement in wider economic prospects”.
Exponential Training Managing Director, John Moore, believes that “Many public and private sector organisations that have traditionally used consultants are still not sufficiently confident to instigate major new projects. I believe that many organisations are focusing on improving and developing their internal capacities, processes and systems in preparation for when the economy picks up”.
Another sign of the times is the dramatic increase in the number of fee-earning consultants: MCA reports that the number rose by 10 per cent in 2011 to 29,800.
Exponential Training has seen a marked increase in the number of organisations turning to training and developing their own internal consulting capability and capacity. “We have also seen an increase in the number of individuals registering on our distance course, Certificate in Management Consulting Essentials” added John Moore.