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Deloitte reported its weakest revenue growth since 2010 in the past year, as demand for its consulting services slowed sharply in the Americas and Asia amid tougher economic conditions.
Figures posted on its website this week showed that its global revenues only increased by 3.1 per cent to $67.2bn during the year to May 31, its worst performance in 14 years.
The weak performance was driven by a significant slowdown in the firm’s consulting division, its largest business line, which accounts for over 40 per cent of revenue and had been a significant driver of growth in previous years.
It reported sales growth of 1.9 per cent in local currency for the year, compared with 19.1 per cent growth in the previous 12 months and 24.4 per cent in the year to May 2022.
Deloitte is the first of the Big Four to publish a breakdown of its global results for the 2024 fiscal year.
Partners at its main rivals — EY, KPMG and PwC — have indicated privately that they also expect to report a slowdown in growth as a difficult economic backdrop in key markets prompted companies to cut spending.
Revenue growth was strongest in Europe, the Middle East and Africa, Deloitte said, at 8.5 per cent.
In the Americas, the largest of its three regions, its rate of growth slumped to 1.4 per cent, compared with 17.5 per cent in the previous fiscal year. Deloitte did not publish a growth rate for its Asia-Pacific region, which the other figures indicated was flat to down.
The Big Four have all suffered sharp slowdowns in China, previously a strong growth market, as the economy there has reeled from a property slump.
Australia has also been weak, partners have said, as the fallout from a tax secrets scandal at PwC has intensified scrutiny of consulting firms there.
“In a complex global environment over the past year, Deloitte successfully sustained a growth trajectory while investing heavily in the next generation of capabilities aligned to emerging areas of client demand,” said Joe Ucuzoglu, Deloitte’s global chief executive.
Tax & Legal was the firm’s fastest growing business line at 8.7 per cent in local currency, still a decline on the previous year. Revenue growth in its audit and assurance business fell to 4.1 per cent, while its financial advisory business saw revenue decline by nearly 4 per cent in local currency, as merger and acquisition activity remained subdued.
The Big Four firm is in the process of overhauling its global operations to cut costs and reduce the organisation’s complexity.
Under the plan, its main business units will be cut to four — audit and assurance; strategy, risk and transactions; technology and transformation; and tax and legal — from the five the firm has had since 2014.
Deloitte’s global workforce remained broadly flat at 460,000.
