The Saudi consulting boom is slowing down to help Riyadh pursue his huge infrastructure ambitions by reassessing the vast amounts he is paying to external advisors.
According to Industry Research Group Source Global, the Kingdom’s consultant market exploded from 25% growth, up 38% in 2022, 38% in 2023 and 25% growth in 2023, and exploding from 25% growth.
Dane Albertelli, senior research analyst at Source Global, added that the consulting firm felt the boom could “may be maintained a little more.”
The slowdown comes when Riyadh is tackling the need to show returns after years of crazy spending, as he is forced to strengthen his belt and replicate his spending.
Last month, the Kingdom’s powerful public investment fund imposed a year-long ban on PWCs being given new advisory work. He believes the move is partly related to the government’s frustration with the enormous amounts spent on consultants to push Crown Prince Mohammed Bin Salman’s transformation agenda.
Visitors see information promoting Saudi Arabia’s neommega project at the World Economic Forum in Davos © Stefan Wermuth/Bloomberg
“Consultant fatigue hasn’t become quiet. Speaking of which, how loud is it? They added that the PWC ban “feels like a very specific, large-scale event that came out of its exact theme.”
The rest of the growth in Saudi Arabia and the Gulf is benefiting from consulting companies struggling with the Slack domestic market. PWC’s Middle East revenues grew 26% in the 12 months to June 2024, compared to the UK’s only 3% growth. Preliminary data from Source Global estimates that the Gulf region consulting market reached $7 billion in 2024, with Saudi Arabia, the region’s largest economy.
The Kingdom’s so-called Giga Project, especially the new economic zone Neom and its futuristic skyscraper city, have fed the industry. The sovereign assets fund, the dominant force behind Saudi Arabia’s infrastructure commitment, has fueled a great demand for advisory work.
The Kingdom’s need to develop strategies to establish everything from the new economic sector to the entertainment industry has provided a stable business flow for strategic consultants in companies such as McKinsey, BCG, and Bain.
To move quickly when establishing these projects, PIF and its subsidiaries hired an army of consultants and strengthened their employees to strengthen practices known as body shopping, including the so-called Big 4 consulting firm.
However, all the spending “has been a massive anxiety that Neom was spending too much money on consultants,” said someone familiar with the project. Neom said, “We were being fooled. There are broader questions about the consulting company and how they are using Giga Project.”
There is concern about how much money is flowing to consultants as cuts in oil production and lower prices constrain government spending in economies that rely on diversifying but crude exports.
National Oil Company Saudi Aramco cut its 2025 dividend by 30% this month after a 12% decline in net profit last year. The cuts in payments will be hit by the funding of the Saudi government and PIF, which owns 16% of Aramco.
The Kingdom is also struggling to attract foreign direct investments to support the trillion dollars needed for bin Salman’s Vision 2030 project. According to FDI market data, Saudi Arabia aims to invest $100 million in annual inbound investments by 2030, but last year secured capital expenditure worth $220 billion on green or brownfield projects.
PWC’s Middle East revenues rose significantly in 2024, but have only been banned for a year for further consulting work © Krisztian Bocsi/Bloomberg
As costs are more restricted, consultants are putting pressure on fees.
“It’s kind of a race about who’s going to discount,” said the local consulting boss. “That consulting market, which we flew a few years ago, is now a really difficult environment.” They said their margin was “half or 60%” of what they made two years ago
However, not all businesses offer sudden discounts. An executive at Boutique Consultancy said it had cut the price to under 5%. “It should be less because no one has in mind what the cost should be.” It’s fashionable to hear “my boss wants to cut costs” in Saudi ministries,” they added.
However, price pressures are part of the consequences of increasing competition due to the rapid expansion of companies in the region. Albertelli said consulting firms and accounting firms loading the Gulf Coast have created a “buyer market” and that clients have the power to determine bigger choices and prices.
According to industry insiders, the Saudi Arabian market remains a major opportunity as the government continues to spend large amounts on various projects. However, the types of work are changing and the government now needs specialized expertise rather than talent to get projects off the ground.
We expect high demand, especially as Saudi Arabia is struggling to meet projects such as the 2029 Asian Winter Olympics.
However, many believe slowing is inevitable. “We expect people in the industry to consider questions that are right for the money for a while,” said the executive, one of the biggest consultants.
