Consultant fees boosted by growth in outsourcing

Management consultants earned a record £10bn in fees last year, with one of the main drivers being companies' demand for advice on outsourcing jobs to low-wage countries such as India.

Total spending on consultants rose 9.4 per cent in the 12 months to 31 December - double the rate of growth in the previous year, the Management Consultancies Association said yesterday. Spending on advice about outsourcing rose 28 per cent in 2003.

Bruce Petter, the executive director of the MCA, said: "While we did not expect a return to double-digit growth in 2003, if ever, the increase in IT and outsourcing consultancy over the past 12 months has supported a return to significant growth after a tough year in 2002, which is extremely encouraging for the consultancy sector. MCA member firms are also expecting the sales cycle for IT work to shorten in the next quarter, which suggests this trend will continue through 2004."

The survey found MCA members were particularly confident about winning business from the primary industries - including utilities, mining and metals - as well as financial services and the public sector.

Consultants' confidence in the overall UK economy has risen for the past four quarters, after declining for most of 2002.