Engineering Industry Fuels $718 Billion in U.S. Economic Activity, Supports 5.8 Million Jobs, New Research Finds

ACEC Research Institute forecasts industry revenue will surpass $500 billion in 2026 as AI-driven data center construction, energy demand, and infrastructure investment fuel growth despite a broader construction slowdown.

America’s engineering and design services industry supported a record $717.7 billion in U.S. economic activity and nearly 5.8 million jobs in 2025, according to new research released today by the ACEC Research Institute.

The industry’s economic contribution grew 4.7 percent from 2024, underscoring its expanding role in the American economy.

The Institute’s 2026 Economic Assessment and Forecast of the Engineering and Design Services Industry, conducted by Rockport Analytics, projects that industry revenue will surpass half a trillion dollars for the first time in 2026, reaching $506.6 billion. That represents 5.6 percent growth over 2025, even as overall U.S. construction spending is forecast to decline 1.3 percent.

The findings reveal a significant shift in the American construction economy. While conventional commercial and residential construction remain constrained by high financing costs, investment in technically complex projects that include power generation, water systems, and public infrastructure is driving sustained demand for engineering services.

“The engineering industry is proving to be a powerful engine of economic growth, supporting millions of American jobs and generating economic activity far beyond the firms themselves,” said Daphne Bryant, executive director of the ACEC Research Institute. “As the nation races to expand its energy capacity, modernize infrastructure, and meet the demands of artificial intelligence, engineering firms are central to making those investments possible. This research demonstrates both the industry’s economic significance and the opportunities ahead.”

Engineering’s Economic Impact Extends Across the U.S. Economy

The report finds that the engineering and design services industry generated $479.8 billion in direct revenue in 2025, a 4.5 percent increase over the previous year. Through its operations, supply chains, and employee spending, the industry supported:

• $717.7 billion in U.S. GDP, a 4.7 percent increase over 2024.

• 5.8 million American jobs, including 1.72 million directly employed in engineering and design services.

• $447.3 billion in labor income across the economy.

• $144.6 billion in federal, state, and local tax revenues.

Average annual industry wages of $119,500, an increase of 4.2 percent from 2024 and approximately 27 percent since 2019.

The industry’s economic reach extends well beyond engineering firms. Approximately 4 million jobs were supported through supplier activity and household spending, including employment in manufacturing, health care, retail, finance, and other sectors.

Texas and California led the nation in engineering-related economic contributions, generating $99.4 billion and $98.4 billion, respectively, followed by Florida at $42.6 billion. Together, the three states accounted for approximately one-third of the industry’s total contribution to U.S. GDP.

AI Boom Creates New Demand for Engineers, Power, and Water Infrastructure

One of the report’s most significant findings is the expanding impact of artificial intelligence investment on engineering demand.

U.S. data center construction spending increased from $20 billion in 2023 to $49.7 billion in 2025. Spending is projected to more than double again, reaching $108.6 billion by 2030.

The growth extends far beyond the data centers themselves. New facilities require substantial investments in electric power generation, transmission lines, substations, cooling systems, water infrastructure, and transportation connections.

The report also highlights the growing pressure that data centers are placing on the nation’s electricity supply. Data centers accounted for an estimated 4.4 percent of U.S. electricity consumption in 2023 and could account for between 6.7 percent and 12 percent by 2028, according to Lawrence Berkeley National Laboratory.

“What’s remarkable about this forecast is that engineering demand is accelerating even as the broader construction market contracts,” said Jon Gray, principal at Rockport Analytics and chief economic advisor for the Institute. “Investment is increasingly concentrated in technically complex projects, particularly data centers, power, water, and infrastructure. These projects require extensive engineering services, and that demand is supporting industry growth even when other construction markets are struggling.” 

Engineering Industry Poised for Continued Growth Through 2031

The report forecasts that engineering and design services revenue will reach $635.6 billion by 2031, representing nearly $156 billion in additional annual revenue compared to 2025.

Engineering-intensive construction spending grew 6.3 percent in 2025 and is projected to increase another 4.2 percent in 2026, substantially outperforming the overall construction market.

Federal infrastructure investment remains another important source of demand. The report identifies $198.6 billion in previously obligated but undisbursed funding under the Bipartisan Infrastructure Law across four major federal agencies. These commitments support a multiyear pipeline of infrastructure activity, although the funding includes construction, equipment, and other project costs rather than exclusively engineering services.

Engineering firms also reported a median project backlog of 12 months in the third quarter of 2026, providing additional visibility into future business activity.

Despite the positive outlook, the report identifies several risks that could constrain growth, including high financing costs, rising construction material prices, grid interconnection delays, permitting challenges, and shortages of specialized engineering talent.

The findings suggest that engineering firms serving infrastructure, energy, water, and data center markets are particularly well-positioned for continued growth, while firms dependent on conventional commercial and residential construction may experience a slower recovery.

The 2026 Economic Assessment and Forecast of the Engineering and Design Services Industry is the seventh annual assessment conducted by Rockport Analytics for the ACEC Research Institute. The study examines the industry’s economic performance, employment, wages, tax contributions, and future outlook using public, private, and proprietary economic data.