For years, the Saudi consulting market was booming. It was a magnet for top talent and a huge source of business for global firms, with growth rates sometimes hitting an incredible 38%. But things are changing, and understanding these new dynamics is key for any consultant working in this crucial region.
The Saudi government, especially through its powerful Public Investment Fund (PIF), is now taking a much closer look at how much it's spending on outside advice. This isn't just a small tweak; it's a major strategic shift. Riyadh wants to see real results from its ambitious "Giga Projects" like Neom. After pouring tons of money into Crown Prince Mohammed Bin Salman's Vision 2030, the focus is now squarely on smarter spending.
What's driving these changes?
The year-long ban on PwC from getting new PIF advisory work was a clear signal. Even with PwC Middle East showing impressive 26% growth, the ban hints at growing "consultant fatigue" within government circles. It seems a mounting frustration over the sheer volume of funds going to consultants is finally boiling over. As one insider close to the Neom project put it, there is "massive anxiety" about consultant spending.
This heightened scrutiny is driven by a few key factors:
- Financial realities: When oil production dips and prices soften, it naturally impacts government budgets. Even though Saudi Arabia is diversifying, crude exports still play a major role.
- Accountability: After significant investments, the Kingdom is now laser-focused on seeing concrete progress and measurable results from its ambitious initiatives. It's all about accountability.
- Evolving needs: The type of advisory work needed is changing. While early phases required broad expertise to get projects off the ground, the government now needs highly specialised knowledge for complex execution and strategic development.
What this means for your practice
This market slowdown and intensified competition are creating what's known as a "buyer's market." Clients now have more power to choose firms and, crucially, to negotiate fees. Local consulting firms are seeing their profit margins slashed by as much as 40% to 50% compared to just two years ago. That familiar phrase, "my boss wants to cut costs," is now a common refrain in Saudi ministries.
Yet, despite these pressures, the Saudi Arabian market still presents significant opportunities. The government remains committed to huge investments across various projects. This means there'll be an ongoing, strong demand for consulting skills, especially as deadlines for initiatives like the 2029 Asian Winter Olympics draw closer.
For consultants, this shifting landscape means adapting. You'll need to navigate a more discerning client base and competitive environment. Demonstrating clear, measurable value and offering targeted expertise won't just be helpful; it will be absolutely essential for sustained success. The era of unchecked rapid growth might be cooling, but for those who can adapt and demonstrate unique, indispensable value, the prospects remain incredibly compelling.