A new report has found that Australia’s energy and resources consulting market remained the second largest in the world, growing 4.7 per cent to over $US1 billion in 2017.
The report, published by Source Global Research, finds that although Australia’s energy and resources market remains the second largest in the world — behind only the massive US market ($US7.85bn) — the DACH market has closed the gap on Australia and now sits only $US18.1m behind in third place.
The report states that the reason why this gap has closed is partly because Australia’s energy and resources market grew slightly slower than both the DACH market and the global market as a whole — both of which increased by 5.9 per cent in 2017. The global energy and resources consulting market is now worth $US15.53bn.
Energy remains the largest consulting sub-market within Australia’s energy and resources sector, with work in this sub-market valued at $US465.3m in 2017. This is followed by the primary resources ($US329.7m) and utilities ($US270.4m) sub-markets. The consulting services most in demand among the sector’s clients are technology ($US368m), strategy ($US259m), and operational improvement ($US217m).
The Source Global Research report also identifies the following as key drivers of consulting growth in Australia’s energy & resources consulting market:
Transformation and restructuring in energy:
An improved oil price freed up energy companies to invest in efficiencies and restructuring across the whole value chain, with numerous proofs of concept starting to be seen around the effective use of emerging technologies.
Digital transformation in mining:
Miners are the biggest buyers of consulting in the primary resources industry, and they benefited from improving commodity prices in 2017. This enabled them to increase their investments in emerging technologies, particularly as a driver of greater efficiencies.
Improving customer interaction in utilities:
Faced with an increasingly competitive market, utilities clients continued to invest in customer service and maintaining market share in 2017, generating good revenue growth for consultants in this space.
Edward Haigh, a Director at Source Global Research said, “Rising commodity prices boosted energy and resources companies’ margins through 2017, which created greater consulting demand than we’ve seen in recent years.
“The release of pent-up demand was particularly welcome in the energy and primary resources industries where lower commodity prices put the pause button on a number of large projects in 2015 and 2016.”
A Partner at Baringa Partners, Ilesh Patel, said, “We’ve seen the most significant growth in Australia and South East Asia—these markets are absolutely booming from a consulting perspective. There have been some deep market reforms to the power industries in those regions, which resulted in a lot of change and a lot of investment in clean technology over the last 18 months.
“The changes are affecting both the utilities and the oil and gas industries.”