5 Numbers That Define Engineering’s Business Outlook in 2026
Engineering firms are entering 2026 with strong backlogs and improving economic confidence, but the outlook is more measured than a year ago. The ACEC Research Institute’s Q1 2026 Engineering Business Sentiment report drawn from 628 firm leaders surveyed in January points to five numbers that capture where the industry stands.
- 11 months — The median backlog held steady at 11 months in Q1 2026, unchanged from the prior quarter and flat year over year. Nearly half of firms (47%) report backlogs of one year or more, and large firms (500+ FTEs) carry a median of 13 months. Backlogs remain the clearest sign of the sector’s underlying strength. Underpinning the +82 Net Rating firms gave their own financial condition. The highest of the three sentiment measures tracked.
- 88% — The vast majority of firms (88%) still have at least one open position, down just four points from last quarter. The median number of openings per firm edged down from six to five, and the average vacancy rate held flat at 7% of total staff. One in five firms (19%) reports that 10% or more of their positions are unfilled, a persistent gap that continues to cap growth capacity. Despite this, 65% of executives expect hiring to increase over the next 12 months.
- 47% — Nearly half of all engineering firms (47%) now have a formal AI strategy in place, up 18 points from a year ago. The share with no strategy and no plans to build one dropped to 22%. Adoption splits sharply by firm size: 82% of large firms (500+ FTEs) have a policy, compared to just 11% of small firms (25 or fewer FTEs). Confidence in AI’s impact is also rising fast, 86% of leaders expect it to positively affect their firm in the coming year. This metric is up 23 points since the question was first asked in 2024.
- 91% — Among executives who expressed negative future economic sentiment, 91% point to the political environment as the cause, the top concern by a wide margin. Followed by general economic uncertainty at 81%. Concern about government spending disruptions has risen sharply, with 49% of firms now citing it as a top worry, up from 28% in early 2024. Recession fears, by contrast, eased: executives place the probability of a recession in the next six months at 38%, down seven points from last quarter.
- +89 — Data Centers posted the highest current sentiment of any sector at a Net Rating of +89, followed by Energy and Utilities at +78. Both are the only sectors to have improved year over year. Every other tracked sector softened, with the steepest declines in Federal/Military and Government Buildings (−15), Transit/Rail (−13), and Education (−13). Looking ahead 12 months, Data Centers (+50) and Energy and Utilities (+49) again lead, while Justice and Convention/Cultural Facilities sit at −1, the only segments projecting negative outlooks.
Watch or Listen to the Engineering Influence podcast episode discussing the findings of the report with Senior Researcher at the ACEC Research Institute Joe Bates.
