Government, Infrastructure and Healthcare are global growth priorities for KPMG and we are confident that we will see significant demand for services in these areas in the years to come.
However, 2011 was a challenging year for our Public Sector practice, thanks to an unprecedented squeeze on Government spending on Advisory services in two of our main markets, the UK and the Netherlands.
Demand for Audit and Tax services held up well across Europe, not least in Germany, where we have a strong practice serving state-owned companies, but our net sales were down 14%. However, we were able to respond positively to the market downturn in the UK and the Netherlands by quickly redeploying talent to other parts of the business.
Government demand for services in the UK and the Netherlands has undergone a major shift in the last 18 months towards a clear need for high-value, financial and commercial advice and support. This plays to our core skill set and bodes well for the future of our practice.
We are currently working on a series of complex and high-profile assignments helping Government clients address their most important challenges — promoting economic growth, reducing fiscal deficits and transforming the delivery of public services.
We have developed a number of propositions to help clients come to terms with the consequences of the global financial crisis. We are helping them to release value from assets; transform service delivery; respond successfully to financial pressure; and deploy next generation technology to lower costs and improve business performance.
Our Healthcare practice, recently boosted by senior hires from industry, performed very strongly, despite the squeeze on Government spending. Health systems the world over face similar challenges — rising costs, demographic change and valuable but costly advances in medical technology. We have developed a suite of truly global solutions that address these challenges. Infrastructure is another area where we expect high demand in the coming years, not least in Saudi Arabia and the Gulf States where Governments are willing to invest for the future.
Our priority is to return to sustained and profitable growth, which we expect will happen in 2012, to develop a strong Advisory practice in Germany and to target new growth markets in Europe.
*Growth rate figures in the 'Markets' sections are for ELLP firms at 30 September 2011, ignoring the impact of mergers and exchange rate fluctuations (see note 3)