The results of Consulting's annual Executive Outlook are in—and the numbers are looking good. Really good. While the economy hums along, consulting firms are doing their very best to take full advantage of the momentum while the going—and growing—is good. Pipelines remain strong and firms are still in the midst of a hiring frenzy as they need those human resources to get all the work done. Let the good times roll would seem to be the mantra for 2018 based on the results of Consulting magazine's annual Executive Outlook Survey.
Continued positive economic momentum combined with a massive corporate tax cut coming (although that tax cut wasn't a reality for the majority of the time the survey was out in the field) leads to an upbeat and bullish forecast among consulting executives. Sprinkle in a dash of healthcare upheaval and increased infrastructure spending on the horizon, and the results speak for themselves.
Of course, it's not always so cut-and-dried. The economic engine that will keep the good times rolling is influenced a great deal by what happens in Washington… and maybe even what happens on Twitter.
And, as we've seen plenty of times before, what we think will happen probably won't. Global unrest, international (nuclear) threats, domestic dissatisfaction and pending inflation could be wet blanket over what most expect to be a booming economy.
The results of our survey may just be a tad overly optimistic as most economists point out that we're most likely still in a relatively slow growth mode and the global economy will continue to have to settle for growth below 3 percent.
The same will also be true of the U.S. economy, despite President Trump's promises to the contrary. But there's really no way to dampen the optimism that's prevalent right now when you look at survey results.
Consulting asked firm leaders about their business over the last 12 months, as well as what they're expecting in 2018. The research was conducted in November and December with more than 130 Managing Directors, Partners and Vice Presidents weighing in.
Comparing last year's projections with this year's reality is always a good place to start. For the year that just ended, a staggering 97 percent of executives said they experienced real revenue growth, even higher than the whopping 94 percent that predicted it in last year's survey.
And 72 percent said that the growth was higher than 10 percent, six percentage points higher than the 66 percent who had forecast double-digit growth for 2016. So, in reality, things were even better last year than what consulting firm leaders had forecasted for 2017 at the end of 2016. And that's what a bull market is all about.
As far as forecasting 2018, those numbers, as one might expect, aren't any less rosy. Case in point: a staggering 98 percent of executives are forecasting growth, and 94 percent are saying that growth will exceed 6 percent.
Both of those numbers are up over last year. The forecasts and projections of top-line growth are significant, but does that growth make it to bottom line? According to our survey results, it does.
In 2018, a stunning 95 percent of firm leaders anticipate net profits will improve, while only 1 percent say they'll be down this year. The other 4 percent say they anticipate no change in net profits. And furthermore, some 62 percent, up from 57 percent last year, say net profits will be up more than 10 percent in 2018.
As part of the survey, we asked participants to rate how concerned they are about certain internal and external issues. There, the survey showed even more positive signs as new client business development and client retention continue to top the list.
In previous years, pricing pressures and sales cycles were top of mind. Meanwhile, internally, the biggest concerns in 2018 are setting new strategic goals/direction, resetting compensation expectation and voluntary retention—all signs of robust economic growth.
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