ACEC Research Institute Q3 Report Insights

Engineering Optimism Surges to Record Highs, Backlogs Rebound

Positive News Tempered by Future Political and Economic Uncertainties

Washington, D.C. – The ACEC Research Institute today released its Q3 2025 Engineering Business Sentiment Study, revealing historic optimism across the engineering and design services sector. Confidence in the U.S. economy surged to its highest level since tracking began in Q4 2021, recovering from a historic decline in Q2, while firm finances and industry outlook remain robust.

Record Optimism in the Economy and Industry

• Confidence in the U.S. economy jumped 39 points over the previous quarter, reaching an all-time high Net Rating of +50.
• Firms’ confidence in their own finances remains exceptionally strong (+83), and optimism about the overall engineering industry is also high (+78).
• More than half of firms (55%) report a backlog of one year or more, with the median backlog increasing from 10 to 12 months after two quarters of decline.

“Engineering firms are showing remarkable confidence in their financial health and in the broader economy, even amid ongoing political uncertainty and cost pressures,” said Joe Bates, senior research consultant at the ACEC Research Institute.

While current sentiment stands at record levels, concerns over future political and economic uncertainties persist.

Workforce Still a Challenge

• Nearly 9 in 10 firms (89%) continue to report open positions, with a median of 5 openings per firm.
• The share of firms with 10% or more of positions unfilled dropped to 19%, down from 27% last year, signaling slight improvement but continued strain in the labor market.

Future Outlook: Growth, but Caution Remains

• Respondents are divided on the future of the U.S. economy and the health of the industry. Nearly equal percentages think they will be worse 12 months from now, as think they will be better.
• Firms are most optimistic about growth in Data Centers (+52), Energy & Utilities (+35), and Airports (+32).
• 60% of firms expect to increase hiring over the next 12 months (Net Rating of +52).
• Concern about inflation remains high, but sentiment improved significantly, dropping 17 points since last quarter. Tariff concerns also eased, down 27 points.
• Recession fears are fading, with only 41% of firms predicting a recession within six months, down from 54% last quarter.

“The new report shows that engineering firm leaders have largely tuned out the noise on tariffs and are preparing to act only once policy is clear and the impacts are known,” Bates added. “This data proves how resilient the engineering industry truly is to short-term bumps in the road.”

About the Study

The ACEC Research Institute surveyed 876 executives from engineering firms nationwide between July 24 and August 11, 2025. The study tracks sentiment on current and future business conditions, market backlogs, workforce dynamics, and policy concerns.

About the ACEC Research Institute

The ACEC Research Institute is the research arm of the American Council of Engineering Companies — the business voice of America’s engineering industry. The Institute conducts original research on business performance, economic conditions, and emerging challenges facing engineering firms.