Resource
Engineering Business Sentiment Survey: Strong Firm Confidence Holds as Policy, Tariff, and Funding Uncertainty Intensify
The Q1 2026 Engineering Business Sentiment Survey, produced by the ACEC Research Institute, captures a pivotal moment for the engineering and design services industry. While firm-level confidence, backlog, and hiring intentions remain strong, executive outlooks for the broader U.S. economy have softened amid escalating tariff concerns, federal funding uncertainty, immigration policy pressures, and shifting monetary policy expectations. The results reflect an industry that remains operationally resilient but increasingly cautious about external risk factors shaping 2026.
Why This Research Matters
• Engineering firms are early-cycle indicators of infrastructure and development activity.
• Policy-driven uncertainty — including trade actions, infrastructure disbursement timelines, and workforce visa constraints — is directly influencing capital planning and hiring decisions.
• Sentiment data provides forward-looking insight before shifts appear in GDP, construction spending, or employment statistics.
Key Findings
• Firm-level financial sentiment remains positive, with strong revenue expectations and sustained backlog levels across most firm sizes.
• Backlogs continue to average approximately one year, providing near-term stability despite macroeconomic volatility.
• Hiring pressure remains elevated as firms compete for technical talent amid structural workforce shortages.
• Confidence in the broader U.S. economy has moderated compared to previous quarters, driven primarily by tariff escalation risks, uncertainty around federal infrastructure funding implementation, and political instability.
• Firms express growing concern that trade policy and regulatory unpredictability could slow private-sector investment, particularly in commercial and industrial markets.
• Hot Topics this quarter include, salary increases and staff turnover, as well as AI strategy, staffing plans, adoption acceleration.
Methodology
The Q1 2026 survey was conducted among ACEC member firm executives nationwide in early 2026. Sentiment scores are calculated using a Net Rating methodology to assess relative optimism or pessimism across firm finances, industry conditions, and macroeconomic expectations.
Practical Applications
This research enables firm leaders to benchmark sentiment and risk exposure against peers while informing hiring, capital investment, and market diversification strategies. Policymakers can use the findings to understand how trade, immigration, and funding policy decisions are influencing engineering capacity. Industry stakeholders can apply these insights to anticipate sector-specific shifts in a year marked by elevated uncertainty but sustained underlying demand.