Engineering Firms Confident Despite Economic Concerns
Key Highlights
- Nearly half of engineering firms report backlogs of 12 months or more, indicating strong project pipelines;
- 92% of firms are actively hiring, with 65% planning to increase staffing over the next year;
- Industry confidence remains high (+84 for firm finances, +72 for industry), but economic optimism has declined to +34, with recession probability estimates rising to 45%;
- Political and economic uncertainties are the top concerns influencing negative sentiment about the broader economy.
By ALLISON SCHNEIDER, ACEC Research Institute
December 5, 2025 ● Engineering firms maintain strong confidence in their financial position and industry fundamentals amid headwinds, while optimism about the broader U.S. economy weakens significantly, according to the Q4 2025 Engineering Business Sentiment report released today by the ACEC Research Institute.
The quarterly study reveals a striking divergence: firms report robust net ratings for their own finances (+84) and the engineering industry overall (+72), while sentiment about the U.S. economy dropped 16 points to +34 compared to the previous quarter.
Looking ahead 12 months, expectations for the national economy have turned negative again (-4).
"Engineering firms are demonstrating remarkable resilience in the face of mounting economic headwinds," said Joe Bates, senior research consultant at the ACEC Research Institute. "With nearly half of firms carrying a year or more of backlog and 92% actively hiring, the industry is staying busy. However, the sharp decline in economic optimism signals that firm leaders are preparing for potentially turbulent conditions ahead."
- To see the full Q4 2025 Business Sentiment report, click here.
Key Findings Show Industry Strength Amid Caution
The report, which surveyed 710 engineering firm executives between October 28 and November 10, 2025, found that current business conditions include work backlogs and continued efforts to hire:
- 48% of firms report backlogs of 12 months or more, with a median backlog of 11 months;
- 92% of firms have open positions, with an average of 7% of positions unfilled;
- 65% plan to increase hiring over the next 12 months, resulting in a +57 net rating for future hiring intentions;
- Data Centers (+86) and Energy & Utilities (+79) lead all sectors in current sentiment.
At the same time, concern about broader economic conditions is rising. Political uncertainty (89%) and general economic uncertainty (77%) top the list of concerns driving negative sentiment. Firm leaders estimate a 45% probability of recession within the next six months, up from 41% in Q3.
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The American Council of Engineering Companies is the business voice of America’s engineering industry. We represent nearly 5,500 firms employing more than 640,000 engineers, architects, land surveyors, highly trained specialists, and licensed professionals who design and improve our world.
ACEC is a federation consisting of 51 state and regional Member Organizations, advocating for policies at the federal, state, and local level that promote economic growth and improve the quality of life for every American. For more, visit www.acec.org/about-acec/what-is-acec/