WASHINGTON — The ACEC Research Institute recently released its Q3 2022 Engineering Business Sentiment report findings. Top issues this quarter include workforce challenges and the economy.
The survey offers a comprehensive look at current and future conditions in engineering and the larger economy from the viewpoint of 600 executives across the engineering and design industry. It measures sentiment through use of a “Net Rating” system with zero being neutral. The higher or lower the number, the stronger the sentiment (positive or negative).
“Engineering executives are strongly optimistic about the industry’s economic outlook, but their confidence in the U.S. economy is plummeting,” said Joe Bates, a researcher with the ACEC Research Institute. “Engineering executives are unmistakably more pessimistic about the current economy than they were even just three months ago. Looking ahead, it’s even worse.”
The current sentiment of the U.S. economy is -15, down 28 points from last quarter. Future sentiment for the U.S. economy 12 months from now continued to decline compared to last quarter, furthering a dramatic downturn first noted in Q2. Future sentiment for the U.S. economy fell 8 points and is solidly in negative territory at -40.
Concern about inflation remains extremely high, however, it has subsided somewhat from last quarter. The Net Rating declined from +85 to +71.
At the same time, future sentiment remains positive for firms’ finances (+29) though it has declined 4 points. Future sentiment for the industry has declined by 5 points and stands at +11.
Workforce issues remain top of mind as projects funded by the bipartisan infrastructure bill moves forward. Underscoring the impact of a tight labor market, in the past three months, a majority of firms (52%) have turned down work due to workforce shortages.
“Quarter after quarter, we see workforce issues register as one of the top concerns for engineering firm executives,” said John Carrato, chair of the ACEC Research Institute. “Still, as the backlog of projects grows, optimism about the industry is holding steady. Engineers are always up to the challenge.”
The survey found 78% of firms are adding new positions, and 60% are filling vacancies.
Median firm backlog for projects has increased from 11 to 12 months. Forty-six percent of respondents believe their firms will see an increase in backlog of projects over the next year, a number that has declined steadily over the last two quarters.
Sixty-five percent of respondents predict there will be an increase in hiring over the next 12 months at their firms, down from a high of 80% in Q1.
Download the entire study by clicking here.