A recent report from market research firm Environment Analyst indicates that the environmental consulting sector in the United Kingdom (UK) contracted by 8.4 percent in 2010, to stand at slightly less than US$ 2 billion (GB£ 1.2 billion). [1] This is the market’s second consecutive decline after more than two decades of unbroken growth.

This decline of US$ 181 million (GB£ 113 million) was primarily the result of government austerity at the national and local levels. In fact, 70 percent of the overall decline was attributable to the decrease in public spending; the remainder was lost in the private sector. Despite these contractions, sales to the regulated industries increased by US$ 22 million (GB£ 14 million), offering encouragement for 2011.

According to Environment Analyst, the UK’s environmental consulting sector remains highly fragmented, and the recession has transformed the playing field for environmental consulting firms to one of revenue loss, declining fees, and job cuts. The country’s top 32 environmental consulting firms reduced staff by 1,000 positions, a figure that represents more than 8 percent of total staff. Revenue per head and staff utilization rates also declined in 2010.

Environmental Service Areas

Environmental impact assessment and sustainable development, which Environment Analyst tracks as a single practice area, remains the top income generator for UK environmental consultants. Despite a 12 percent contraction from the previous year, 2010 revenue for this service exceeded US$ 269 million (GB£ 168 million). Contaminated land services shrank by 3.4 percent to US$ 255 million (GB£ 159 million), a decrease that was much less than that of the previous year, when revenue shrank by more than 20 percent as a result of steep declines in the housing sector.

Revenue from climate change and energy services, at US$ 218 million (GB£ 136 million), exceeded that from waste management services for the first time in 2010, after the latter underwent double-digit contraction in 2010 to stand at US$ 194 million (GB£ 121 million). The only service offering that grew substantially during 2010 was environmental and sustainability policy and strategy, which increased by nearly 15 percent. This growth is an indicator, perhaps, of increased corporate social responsibility activities and investor pressure on multinational firms.

2011 Market Projections

Despite two years of consecutive market contraction, Environment Analyst believes that the overall environmental consulting market in the UK will show modest growth (0.5 percent) in 2011. This projection is based on two factors:

1. Nearly half of large-firm survey respondents reported that their performance in the first quarter of 2011 was better than they had budgeted for, and a further 41 percent stated that growth was in line with expectations.
2. Long-term drivers for a strengthening environmental service market remain intact: namely, the need to invest in capital infrastructure projects to stimulate a stagnant economy while meeting strict legislative targets in the transition to a low-carbon, low-waste, and energy-secure economy.

The Largest UK Environmental Consulting Firms

Click here for a list of the UK’s 32 largest environmental consulting firms.

About Environment Analyst

Environment Analyst Ltd is a publishing and market research organization focusing on the environmental consulting and support services sector. It collects and analyzes information from the industry for the benefit of the industry. The 2011 Market Assessment of the UK Environmental Consulting Sector includes a 229-page analytical report, a 150-slide executive presentation, a full data package with 105 figures, and a competitor analysis. All components are available to Environment Analyst’s Market Intelligence Service subscribers.

Photograph: Manchester, England by Michael Bittner, Boston, U.S.A.

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Tags: UK, United Kingdom, environmental consulting, environmental consultancy, market analysis