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Engineering Business Sentiment Report Finds AI Expected to Play Large Role in Engineering Firms in the Coming Year
This week, the ACEC Research Institute released the results of its Q1 2025 Engineering Business Sentiment Study which shows engineering firm executives have an overwhelmingly positive business outlook.
Among the standout findings was that artificial Intelligence (AI) is expected to play a significant role in the industry with 78% of firm respondents believing AI will positively impact their firm in 2025.
Senior research consultant for the Institute Joe Bates noted, “AI adoption is becoming a key factor for firms looking to stay competitive, with 63% already developing strategies to leverage AI, showing its potential to transform operations in the year ahead.”
The study noted that optimism about the U.S. economy climbed considerably compared to the previous quarter, increasing 13 points. Sentiment is strongest in Water and Wastewater sector and Data Centers. The perceived likelihood of a recession also fell 8 points from last quarter and is now at 35%.
One of the main concerns among firms continues to be the lack of well-qualified candidates for employment. Forty-nine percent of firms have a project backlog of one year, and at the same time, nine out of 10 firms (89%) have at least one job opening. The median number of open positions rose slightly from five to six.
“As we move into 2025, engineering firms are navigating through a changing landscape which requires a thoughtful approach. Fortunately, a number of our markets remain solid with particular bright spots in Data Centers and Energy,” said Chair of the ACEC Research Institute and CEO of VHB, Mike Carragher. “The industry’s positive outlook, albeit with continuing workforce challenges, highlights its resilience and adaptability.”
Both ACEC and the ACEC Research Institute are addressing the workforce challenge. ACEC encouraged state Member Organizations to participate in Engineers Week held from Feb 16 – 22 to bring engineering to students. Showcasing the valuable work engineers play in communities helps students see engineering as a career path to creating positive change locally. Additionally, the Institute is engaged in a research project looking at the engineering “Firm of the Future” to explore what talent and skills will be needed to staff the firm of 2035. Watch this week’s roundtable to gain more insights from the Institute’s Firm of the Future project.
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The ACEC Research Institute is the independent research arm of the American Council of Engineering Companies (ACEC) — the business association of the nation’s engineering industry. The ACEC Research Institute’s mission is to deliver knowledge and business strategies that guide and elevate the engineering industry and to be the leading source of knowledge and thought leadership for creating a more sustainable, safe, secure, and technically advanced built environment.