The Association for Consultancy & Engineering’s (ACE) Benchmarking study for 2021 reveals that members of the association generated greater revenues in 2021 than in pre-Covid 2019 – and with fewer personnel.
Total staff numbers decreased by an average of 4.2% at larger firms in 2021, and there were 17.4% fewer staff at SMEs than at the beginning of the reported year.
Despite this, revenues were up 1.7% in 2021 for large firms and 1.3% for SMEs.
As a result, overhead and operating expenses dropped – to 17.9% for large consultancies and 19% for SMEs – as companies realised efficiencies.
However, revenue growth was down substantially on 2019, when large firms grew revenues by 6.3% and SMEs by 3.4%. And those revenue figures are not adjusted for inflation. Give that inflation (as measured by the consumer price index), rose by 5.1% in the 12 months to November 2021, that 1.7% revenue growth for large firms may actually represent a decline in real terms.
ACE interim chief executive Laurence Brett said: “Our analysis clearly shows we have been through a challenging period. Despite this, we must recognise that we have fared well compared to more public-facing areas of the economy. Even with this uncertainty, our sector still registered revenue growth.
“Looking ahead, there is plenty for us to be positive about. Not just in terms of the pandemic in 2022, but through the added clarity that the recent publication of the Construction and Infrastructure Pipeline and Integrated Rail Plan have recently brought us.
“With increased interest in the procuring for value agenda thanks to the publication of the Construction Playbook, as well as the release of the Value Toolkit, our industry is still ideally placed as the delivery partner of choice for government, creating new opportunities for our members’ to seize.”