Labor Outlook: ACEC Research Institute: Industry Has Rebounded; Tight Labor Market, Lack of Qualified Workers Remain Barriers to Growth
The Engineering and Design Services industry is showing encouraging signs according to new reports recently released by the ACEC Research Institute. The reports provide an economic assessment of the Engineering and Design Services industry in 2021 as well as an engineering business sentiment report for the first quarter of 2022.
Notably, data show the industry has rebounded from project postponements due to COVID-19, although firms identify a tight labor market and lack of qualified workers as continued barriers to growth.
Tracking the Industry
The ACEC Research Institute is the research arm of the American Council of Engineering Companies (ACEC), with the mission to deliver knowledge and business strategies that guide and elevate the engineering industry. This is the second annual release of the Engineering and Design Services industry assessment, which tracks the industry’s economic contributions, analyzes key economic drivers and forecasts industry growth.
The research also provides new insights into the size and scope of the Engineering and Design Services industry and the impact it has on the economy. Today, the industry accounts for 1.5 million direct full- and part-time jobs, $97,300 in average yearly wages, and registers $338 billion in industry sales annually. In addition, the industry accounts for $198 billion direct contribution to the U.S. GDP with $105 billion collected in total federal, state and local tax.
“The engineering and design industry made critical economic contributions to the nation throughout COVID-19,” explains ACEC Research Institute Board Chair John Carrato. “We kept our industry employed and infrastructure improvements moving forward. Looking ahead, the industry is poised for tremendous growth with the Infrastructure Investment and Jobs Act finally in place. However, we need to expand the pipeline of qualified employees to keep our industry on the path to growth.”
Additional key findings from the Engineering Business Sentiment report show that 97 percent of respondents agreed that the industry labor market continues to be tight, as 90 percent of respondents have at least one open position at their firm. At the same time, 66 percent of respondents believe their firms will see an increased backlog of projects during the next year, and 80 percent of respondents predict there will be an increase in hiring during the next year at their firm.
Linda Bauer Darr, ACEC president and CEO, expanded on how the industry can use these new data. “The ACEC Research Institute continues to provide a unique service to engineering firm CEOs and policymakers with valuable insights as we track economic trends in the Engineering and Design Services industry,” she says. “This data tells an impactful story of how far the industry has come and where we can go, together.”
The sentiment report, conducted after the passage of the Infrastructure Investment and Jobs Act (IIJA), tracked the sentiment of engineering firm leaders around the country. The sentiment is measured with a net rating that subtracts the percentage of negative ratings (pessimistic) from the positive ratings (optimistic). The higher the rating, the stronger the sentiment.
The report found that compared to three months earlier, respondents noted higher positive sentiment for transportation sectors. Positive sentiment for Roads and Bridges was four points higher than the previous quarter, Transit was up five points and Airports was up the most (nine points). Looking ahead 12 months, the net rating of positive sentiment among respondents stayed strong for Roads and Bridges (+67), Transit (+55) and Airports (+53).
Implementation of the IIJA will further increase the optimism for hard infrastructure improvements and the need for qualified workers, adding an expected $132 billion in economic output through 2026 as we tackle some of the largest challenges facing America, including providing safer, more-resilient and sustainable projects in the built environment.
The “2021 Economic Assessment of the Engineering and Design Services Industry” and the “Engineering Business Sentiment, 2022 Q1” reports are available for download at programs.acec.org/impact-report-21.
About Robin Greenleaf
Robin Greenleaf is the CEO and founder of Architectural Engineers and serves as the board chair for the American Council of Engineering Companies (ACEC); email: [email protected]