We are at a precipice where we need to rebuild much of our infrastructure, technology is advancing at a rapid rate, and we have a worker shortage that threatens to stall the construction industry—all while the cost of materials and labor do not show signs of slowing any time soon. With all this in mind, it begs the question, is optimism about the economy up or down? A recent report might shed some light into how executives at engineering firms view the economy.
First, a primer. The ACEC Research Institute survey of 650 engineering firm executives looks at current and future conditions and overall sentiment toward the economy. To do this, it uses a net rating system with zero being neutral. The higher or lower the number, the stronger the positive or negative sentiment. Let’s walk through some of the biggest takeaways.
Economy: Up or Down
Back to the original question of the day: Is optimism about the economy up or down? According to this report, concern about the impact of inflation remains elevated, with 70% at least somewhat agreeing they are extremely concerned about the impact of inflation. This concern about inflation increased 16 points from the last quarter. That is dreadful.
All in all, leaders anticipate the likelihood of a recession in the next six months to be 40%, which is a decline of one point since last quarter.
Still, engineering executives have a good outlook on their firm’s financial standing at +86, the industry overall at +83, and the overall U.S. economy at +39. Optimism about the U.S. economy, specifically, has increased four points from last quarter and is up 54 points from its low of -15 in Q3 2022.
Interestingly, even with the overall positive perspective, there were still some stats that caught my eye worth noting. Roughly 35% of firms have had at least 10% of their staff leave, which is the same as last year when their staff was asked. The median is 7.6% for staff turnover. At the same time, 74% anticipated an increase in hiring in the next 12 months at their firm.
The Rise of AI (Artificial Intelligence)
Nearly half of the executives say their firm uses AI either internally (27%), externally (2%), or both (19%). Some of the top uses of AI internally are business development and intelligence, contract review, proposal preparation, data analytics, and research, just to name a few. Some of the external uses of AI for client projects include data analytics, research, reports, and proposals.
Even with the rise of AI, there will still be an increase in hiring, with 74% of respondents saying they anticipate an increase in hiring in the next 12 months at their firms. This survey shines a spotlight on some of the gaps we see in the workplace today (inflation, workforce, etc.) and some of the opportunities that exist (in industry and with artificial intelligence).
Next Steps
Now that we have a better picture of what the economy looks like for this segment of the market, we must prepare our workforce and we must prepare our technology. We must go back to the basics. Over on Substack, I am exploring how we can prepare our workforce and how we can go back to the basics with technology, ensuring we are set up for success in today’s fluctuating work environment. If you want some tangible tips, head over there and subscribe. I would love to have you join me on your journey.
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