The consulting services industry is one of the least affected by the coronavirus crisis. This is because, amid such a turbulent situation, companies have increased their search for advice that would help them protect employees, as well as stay closer to customers and shareholders.

Moreover, since the nature of work allows industry players to get the job done through the increased use of technology, the industry is one of the earliest pioneers of remote work. This has helped industry players sail through the lockdown period.

This is highlighted well by the share-price rally for major consulting service providers ranging between 13% and 91% over the past three months. The industry has rallied 27.2% during this time frame.

General Industry Strength Intact

With services becoming more and more customer centric through higher speed, incremental deliverables, and cloud technology, the consulting services industry will likely witness stellar growth on the internationalization as well as expansion of newer verticals such as design thinking, digital and cybersecurity.

Global players have heightened their focus on speed, agility, analytics and business process redesign, and are making technology investments and expanding in areas beyond the United States and Europe to other industrialized regions and growing economies. These companies are now increasingly banking on trends such as AI, analytics, cybersecurity and digital. Hence, revenues and income for this multi-billion dollar space have increased steadily in the past few years.

Encouraging Numbers

With the economy reopening and recovering gradually, both manufacturing and non manufacturing activities are gathering steam. Thus, the demand environment for consulting services is anticipated to get healthier in the days to come.

Notably, economic activity in the manufacturing sector expanded 9.5% from May to June as the PMI measured by Institute of Supply Management (ISM) touched 52.6%. This is the second consecutive month of expansion after April’s contraction that had interrupted an impressive growth rally of 131 consecutive months.

Non-manufacturing clocked 11.7% growth from May to June as the NMI measured by ISM touched 57.1%. This too ended a two-month period of contraction after 122 straight months of expansion.

Stocks That Warrant a Look

Over the past three months, the stocks of five major consulting firms have had impressive run on the bourses. CoreLogic CLGX, NV5 Global NVEE and Accenture ACN have appreciated 90.8%, 40% and 29.2%, respectively. Exponent EXPO and Stantec STN have rallied a respective 13.8% and 15.5%.

CoreLogic is a Zacks Rank #1 (Strong Buy) company, currently. Other stocks mentioned above are also potential picks for your portfolio as all of these firms carry a Zacks Rank #3 (Hold), at present.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The chart below shows the three-month price performance of the five major consulting stocks compared with the industry and the S&P 500 composite.

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