Companies
Survey: Engineering Firms Upbeat about Business Conditions
Graphic Courtesy ACEC
A recent survey shows that officials at U.S. engineering firms have a strongly positive outlook about their businesses’ health and the economy overall, especially regarding infrastructure work, but they also say that a shortage of engineers remains a persistent worry.
Looking at engineering market categories, the report shows the positive sentiment is strongest in roads and bridges, with a rating of +84. The result for the water/wastewater segment was not far behind, at +83. But commercial real estate, including offices, hotels, retail and multifamily residential projects, had the lowest score at -3.
Those are some of the findings of the American Council of Engineering Cos. Research Institute’s latest quarterly Engineering Business Sentiment report, released on Aug. 28.
“The data shows executives have a more positive economic outlook, but workforce pressures are still impacting their businesses,” Joe Bates, the ACEC institute’s lead researcher says. “Still we’re seeing optimism across the different sectors.”
The positive results for civil works almost certainly reflect the impact of the five-year, $1.2-trillion Infrastructure Investment and Jobs Act. IIJA's second anniversary is Nov. 15.
The survey of 570 executives from a wide range of engineering firms uses a “net rating” methodology. For example, the net rating for the condition of engineering and design services was +84. The rating for the finances of respondents' individual firms was +83.
Those ratings are lofty, but were down slightly from the prior quarter's, which were +86 for engineering services and +86 for the finances of respondents' respective firms.
Looking for quick answers on construction and engineering topics?
Try Ask ENR, our new smart AI search tool.
Ask ENR →
In addition, sentiment about the U.S. economy registered a +32 net rating, a 14-point gain from the previous quarter.
Firms' median backlog dipped to 11 months, from 12 months in the previous quarter. But the report also notes that 50% of respondents say their backlog is one year or more.
Workforce Worries
Workforce issues continue to loom large in engineering.
For example, 70% of responding firms say the lack of qualified workers is the largest single barrier to their organization’s growth.
In a key finding, 52% of firms say that they continue to turn down potential work because of workforce shortages.
The shortage is most pronounced in the Midwest, with 62% of firms reporting they declined potential business. The picture in the West is nearly the same, with 61% saying they turned down work.
In all, 87% of responding firms say they have at least one opening, a decline from 91% from the last quarter.
Among other business trends, the survey shows that concerns about the supply chain have waned, with 32% of responding firms seeing the situation as a worry, compared with 56% in the fourth quarter of 2022.
In another recent snapshot of design services, the latest monthly American Institute of Architects/Deltek billings index, released on Aug. 23, showed architects report their business generally held level in July, with a billing index of 50. That was down slightly from the June index of 50.1.
