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ACEC Research Institute Releases Findings of Q4 Engineering Business Sentiment Report
Inflation and recession concerns drive economic outlook
WASHINGTON, DC — Today, the ACEC Research Institute released its Engineering Business Sentiment report findings for the Fourth Quarter of 2022.
Top issues this quarter include ongoing concerns about inflation, and workforce shortages which are causing engineering firms to turn down work and be more selective in choosing projects.
Download your copy of the report here.
This survey offers a comprehensive look at current and future conditions in engineering and the larger economy from the viewpoint of 650 executives across the engineering and design services industry. It measures sentiment through the use of a “Net Rating” system with zero being neutral. The higher or lower the number, the stronger the sentiment (positive or negative).
“Everyone is feeling the effects of inflation and engineering firm leaders are concerned about what these economic conditions will mean for their businesses,” said Joe Bates, a lead researcher with the ACEC Research Institute. “Still, they are feeling notably better about where the U.S. economy stands today than they were last quarter.”
Economic & Industry Sentiment
Among respondents, the current sentiment of the U.S. economy is up 15 points from last quarter coming in at a neutral 0 reading, while industry and individual firm sentiment remains extremely optimistic. Firms with 201 – 500 full time employees showed the most positivity about their firm’s finances with a +99 net rating.
Current sentiment remains very optimistic within all market sectors. Sentiment is strongest in the Transportation – Roads and Bridges (+78) and Water/Wastewater sectors (+77).
The Residential Land Development (+41) and Justice (+27) sectors are performing relatively less well, but sentiment is still positive.
Future sentiment remains positive for firms’ finances (+31), but less so for the industry (+12).
At the same time, future sentiment is negative for the U.S. economy at -28, though that reading is up from -40 which we observed last quarter. Inflation (93%) and a recession (84%) are the greatest concerns fueling negative future sentiment.
Workforce Sentiment
Workforce issues remain a hot topic as respondents expect to both increase hiring and have a backlog of projects.
“With inflation and a possible recession weighing on business leaders, it’s telling that engineering executives are so strongly anticipating increased hiring over the next 12 months,” said John Carrato, Chair of the ACEC Research Institute. “There’s a lot of work to do — especially in the transportation and energy sectors where we see so much positive sentiment about the future.”
The survey found 70% of firms have at least three openings, and 69% of respondents predict there will be an increase in hiring over the next 12 months at their firms, about the same as last quarter.
In the past three months, a little more than half of firms (51%) have turned down work due to workforce shortages. Among firms turning down work, most (86%) are being selective about the projects they are accepting, with 25% turning down good, profitable projects.
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