If Phil the groundhog can see his shadow on a freezing February day in the small town of Punxsutawney, Pennsylvania, six more weeks of cold are said to follow. Consultants are a slightly more reliable bellwether: when the economy nosedives the consulting industry follows. When demand for consultants starts to rise it is a general indication that the economy is picking up.

How long the recession will last is a question that cannot be answered yet. But there is good news. Although the consulting industry shrank 2 per cent in the first six months of this year, it is holding up reasonably well with some sectors growing significantly.

“It is too early to talk about recovery,” says Fiona Czerniawska, the head of research at the Management Consultancies Association (MCA). “It has been a very tough year but not as bad as many people feared.”

There are signs of recovery, especially in financial services, which has been a difficult market for the past 18 months with demand falling by 6 per cent last year. Czerniawska urges caution, though: “Banks are starting to earn more money but there are still big unanswered questions about assets and the underlying economy.”

Yet areas of consulting have seen significant growth in the past year as consultants were called in to help businesses to adapt and cut costs to weather the recession.

Demand for business process engineering — helping an organisation to prepare for a new “process”, such as an IT system or outsourcing arrangement — grew by 31 per cent last year, according to a recent MCA survey.

One surprise, says Czerniawska, is that strategy consulting — blue-sky thinking, which traditionally tails off in a recession, — has held strong.

At a time when consultants are in danger of being seen as an expensive luxury, communicating to businesses what they can bring is crucial for the industry.

“More than ever, consultants need to explain what they do and tell individual stories about how they helped an organisation, which is why these awards are so important.”

Sandra Macleod, group chief excecutive of Echo Research, one of the judges of the MCA Consultant of the Year awards, says: “We looked for evidence of things that went beyond doing a professional job — interesting stories of people who managed to turn an organisation around.”

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