Engineering Firms Remain Resilient Amid Growing Economic Uncertainty, New ACEC Research Institute Study Finds 

Q3 2026 Engineering Business Sentiment Study Shows Strong Fundamentals but Cautious Outlook for the Next 12 Months 

Washington, D.C. — August 27, 2026 — Engineering firms are holding strong even as broader economic clouds gather. That’s the headline finding of the ACEC Research Institute’s Q3 2026 Engineering Business Sentiment Study, which captures the views of nearly 600 executive-level leaders across the U.S. engineering industry.

The study paints a picture of an industry operating from a position of genuine strength with healthy backlogs ensuring future work, persistent hiring demand, and high confidence in firm-level performance. But executives are also keeping a cautious eye on inflation, geopolitical tensions, and an uncertain macroeconomic environment.

The full Q3 2026 Engineering Business Sentiment Study is available here.

“The sentiment report shows that the engineering industry continues to demonstrate remarkable resilience,” said Daphne Bryant, executive director of the ACEC Research Institute. “Firms are busy, they’re hiring, and they’re confident in their own performance. At the same time, they’re being smart about the business environment around them. This data helps the industry position for long-term success.”

“An ongoing trend we have found which is even more acute this quarter is the gap between how firms feel about their own businesses versus the broader economy,” added Joe Bates, senior research consultant at the ACEC Research Institute. “Confidence in firm finances and industry conditions is very high, but the economic outlook 12 months from now has turned negative. Firms need to navigate that tension with real discipline — pursuing opportunities while staying attuned to risk.”

Key Findings

• Current conditions remain solid. Firms express strong confidence in their own financial performance (+79 Net Rating) and in the engineering industry overall (+76 Net Rating). Sentiment toward the U.S. economy, while lower, rebounded 13 points this quarter to +32 showing a meaningful improvement from last quarter’s reading.

• Backlogs are durable. Nearly half of all respondents report backlogs of one year or more, with the median backlog holding at 12 months. Firms of all sizes continue to report stable, healthy workloads that allow them to plan on future work.

• Hiring remains active. Eighty-eight percent of firms report at least one open position, with 65 percent expecting to increase hiring over the next 12 months — a Net Rating of +59, up seven points year over year.

• Data Centers and Water/Wastewater lead the market. Industry sector sentiment is strongest in Data Centers (+83) and Water/Wastewater (+82), while performance is becoming more uneven across other sectors.

• The economic outlook ahead is more cautious. Forward-looking sentiment on the U.S. economy has turned negative (-8), even as expectations for firm finances (+41) and the engineering industry (+17) remain positive. Political and economic uncertainty (85%), general economic uncertainty (81%), and inflation (78%) are the leading drivers of concern.

• Inflation concerns are rising. Seventy-two percent of respondents express significant concern about inflation’s impact on their firm — a Net Rating of +58, up 14 points from one year ago, driven in part by rising oil costs linked to ongoing conflict in the Middle East.

• Tariff anxiety has eased. Concern over tariffs has moderated sharply, with the Net Rating falling from +49 in Q2 2025 to just +9 this quarter.

• Recession risk remains on the radar. Executives place the probability of a recession in the next six months at 41 percent — down five points from last quarter but consistent with this time last year.

• Professional licensure is a strategic priority. Virtually all firms (96%) have positions that require a Professional Engineer (PE) license, and 91 percent actively encourage engineers without a license to pursue one. Ninety-three percent say passing the Fundamentals of Engineering (FE) Exam is at least somewhat important for entry-level engineers — underscoring the continued centrality of the licensure pipeline to workforce development.

About the Study

The ACEC Research Institute’s Engineering Business Sentiment Study is conducted quarterly to track the economic outlook, market conditions, and strategic priorities of executive-level leaders at engineering firms across the United States. The Q3 2026 study was conducted between July 28 and August 10, 2026, with 591 completed responses from member firm executives.

About the ACEC Research Institute

The ACEC Research Institute, the independent research arm of the American Council of Engineering Companies (ACEC), is the premier source of insight and foresight that empowers engineering firms to thrive, creating a resilient, secure, and technically advanced built environment.

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