Gulf consulting market to hit $8bn this year despite dip in growth as public spending tightens

Spending on digital and AI consulting work in the region continues to increase

Saudi Arabia's hosting of the 2034 Fifa World Cup is set to boost infrastructure and consulting spend. PA Wire

The Gulf region’s consulting market is forecast to expand by 12 per cent this year, with revenue set to reach $8.3 billion, despite demand growth slowing in certain areas such as the public sector, according to a new report.

This year's growth rate projection is slightly lower than the 13.3 per cent achieved last year, the annual Source Global Research report found, but higher than the 11 per cent previously forecast. It is still around twice as fast as the US, the largest consulting market in the world, the report found.

“Despite not having reached its peak, the GCC’s consulting market is starting to lose some of the breakneck speed of its expansion,” said Dane Albertelli, senior research analyst from Source Global Research. “While growth is looking to be sustained into 2025, growth rates in some sectors, for instance the public sector, [are] set to dip down into single digits.”

Companies are focusing more on resilience and where they invest their money in relation to economic diversification initiatives, the study found. Some of the more ambitious diversification projects are being scaled back, with investment funds being reallocated to projects that are more likely to generate guaranteed economic benefits.

“In Saudi Arabia, for instance, we have seen a realignment of resources to projects that are now deemed ‘mission critical’, with a particular focus on economic hubs like Riyadh and key infrastructure projects that will support events like the 2029 Asian Winter Games and the 2034 Fifa World Cup,” Mr Albertelli said.

Saudi Arabia’s consulting market, the largest in the Gulf, grew faster than the overall market in 2024, at 14.1 per cent, to reach $4.3 billion in revenue for the first time. The growth rate is expected to slow slightly to 13 per cent this year.

The kingdom is focused on diversifying its economy away from oil as part of its Vision 2030 programme, which seeks to widen its industrial base and develop sectors such as technology, property, tourism and infrastructure.

In June, Saudi Minister of Investment Khalid Al Falih said the kingdom was more than halfway through implementing Vision 2030. His remarks came after Finance Minister Mohammed Al Jadaan said in April that the country would “downscale” or “accelerate” some of the projects being carried out under the Vision 2030 agenda to adapt to economic and geopolitical challenges.

Last month, the kingdom's sovereign wealth fund, the Public Investment Fund, also reportedly banned awarding consulting work to PwC. The decision, which also applies to all its subsidiaries, is allegedly in place for a year, until February 2026. Neither the PIF nor PwC commented publicly on the matter.

“We can’t comment directly on the impact for PwC,” Mr Albertelli told The National. “However, firms today really need to demonstrate their value to businesses and state organisations, with the Saudis now being very focused on the return of investment they are getting from consultants."

The Saudi consulting market is now "reaching maturity", he said.

"Despite still spending large amounts of money on consulting, companies in the country are increasingly cost-conscious during the tendering process.

“Clients are no longer just looking at the most exciting and ambitious of projects but are instead only spending large amounts when they know they will see return on these investments.”

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Overall, even though growth in the Gulf consulting market is slowing, it is “still by far the best performer globally”, he said, with hiring and salaries likely to remain high. “The trend is more that the exponential growth we’ve seen in the region, post-Covid is now at an end,” he said.

The UAE is the second largest consulting market in the Gulf region, and is expected to grow by 14 per to $1.8 billion this year, while Qatar's market is anticipated to rise 10 per cent to $811 million. The Gulf is currently shielded from most macroeconomic headwinds because of the considerable state-led investment that is taking place.

“Despite this, businesses and state organisations in the GCC are aware that this might not last and are focusing on making themselves more resilient through investment in digital transformation and supply chain optimisation,” Mr Albertelli said.

Digital in demand

While all sectors recorded double-digit growth rates last year in the Gulf, energy and resources did particularly well, growing by 21.7 per cent, the report found.

“This was largely driven by the sustainability agenda encouraging a transition away from dependence on oil, leading companies to look at ways to diversify their businesses,” it said.

Meanwhile, revenue from financial services consulting work grew by 11.5 per cent to $2 billion and from the public sector rose 11.4 per cent to $1.8 billion.

Nearly half (49 per cent) of companies in the region also reported that they had considerably increased their digital technology investment in the past year. Although large projects are being reorganised, the actual scale of investment is not showing any sign of a slowdown. Up to 59 per cent of companies said investment in digital technology will considerably increase over the next 18 months.

Artificial intelligence within the Gulf region has taken a hit coming into 2025, with many companies reporting they have yet to see any significant benefits. However, two thirds expect more than 30 per cent of their consulting spend to be on AI adoption and implementation, the report found.

In some sectors, particularly retail, there are huge opportunities for expansion in the future, Mr Albertelli said.

“As the market matures and companies in the GCC are becoming more financially savvy about their consulting spend, they are setting budgets and sticking to them – to ensure that they secure the best bang for their buck,” he said. “Sixty-seven per cent say their use of external support will increase in the coming year, and only 1 per cent expect to depend on consultants less.”