Industry Outlook

Engineering Business Sentiment - the Current and Future State of our Industry

ACEC now conducts a bi-annual Engineering Business Sentiment Survey that captures the outlook of firm executives and industry leaders. This survey explores their perspectives on their firm’s financial health, optimism for the engineering and design services industry, and their views on the overall condition of the Canadian economy.

The survey, conducted in partnership with the ACEC Research Institute - the research division of the American Council of Engineering Companies - provides valuable context to the economic data published annually by ACEC, offering a clearer picture of our industry's current state and future direction. By analyzing these findings, ACEC produces reports that deliver actionable insights into current and emerging business conditions and key trends shaping consulting engineering firms across Canada.

The Engineering Business Sentiment report is a critical tool for understanding the industry's opportunities and challenges, helping firms navigate a rapidly evolving landscape.

Key findings from the latest survey:

Current Business Conditions

• Current sentiment is positive. The Net Ratings for firms’ finances (+89) and for industry (+75) are extremely high. The Net Rating for the Canadian economy is +37.
• Current sentiment is very optimistic within all market sectors. Sentiment is strongest in Water/Wastewater and Airports and Harbours (Net Rating +78).
• While still positive, current sentiment is relatively lower in the Education sector (+51), Commercial Real Estate (+52) and Residential (+61).
• The median backlog stands at nine months, and sixty percent indicate their firm has a current backlog of less than one year.
• Eighty-nine percent of firms have at least one opening. The median number of open positions is 10. On average, eight percent of positions are unfilled at firms.

Future Business Conditions

• Future sentiment is positive for the firm’s finances (+37 Net Rating) and the industry (+8), but respondents are less enthusiastic about the future of the Canadian economy (-3).
• Inflation and rising costs (73%), General economic uncertainty (69%), Workforce shortages (67%) and Political environment/uncertainty (67%) are fueling negative future sentiment.
•  Future industry sentiment is positive in all sectors but one. It is highest in Residential – Land Development and Water/ Wastewater (both +32 Net Rating).
• Future sentiment is weakest in Education (Net Rating +11) and Convention Centers, Sports Facilities and Cultural Facilities (0).
• More than half of firm executives (51%) believe their firms will see a higher backlog of projects 12 months from now compared to fourteen percent who think it will decrease.
• Seventy-four percent predict there will be an increase in hiring over the next 12 months at their firms compared to four percent who think it will decrease.
• Concern over the impact of inflation is elevated. Fifty-two percent agree that they are extremely concerned about the impact of inflation on their firm.
• The likelihood of recession in the next six months is forty-three percent according to the average estimate among  firm leaders.

Hot Topics

• A majority (55%) of firm executives indicate they have experience with Integrated Project Delivery models and will continue to pursue more of these models.
• A majority (62%) of firm executives agree that Integrated Project Delivery models have the potential to more equitably share risk and reward than Design-Bid-Build.