In the ACEC Research Institute's Q2 2026 sentiment survey, engineering firms rated their own finances at +79 and their industry's performance at +74. In the same survey, their confidence in the U.S. economy fell 26 points to +19 and their 12-month outlook turned negative. Strong backlogs and rising nerves, in one firm. That gap is a pursuit signal.
It echoes the architecture billings index, which slipped to its lowest reading since January the same month. One measures the supply of design work forming. The other measures how the people running firms feel about what is coming. Both point the same direction, and both are telling you about your 2027 pipeline, not your 2026 backlog.
What the ACEC Q2 2026 Survey Found
The headline is a contradiction that resolves the moment you separate today from next year. Firms are in good shape now and worried about later.
| Firms look healthy now | Firms are bracing for later |
|---|---|
| Firm finances rated +79 | Confidence in the U.S. economy fell 26 points, to +19 |
| Industry performance rated +74 | 12-month economic outlook turned negative at −6 |
| 49% carry backlogs over a year (median 11 months) | 46% put recession odds in the next six months |
| Only 33% turned down work for staffing, down from 51% in late 2024 | ACEC: firms are "more selective, more cost-conscious, and more attuned to macro risks" |
Read the bottom-left cell twice. Two years ago, half of firms were turning away work because they could not staff it. Now only a third are. The delivery crunch is easing. That matters, because it means the constraint is moving from "can we do the work" to "which work should we chase." That is a pursuit-desk question, not a hiring question.
What "More Selective" Means at the Pursuit Desk
When ACEC says firms are getting more selective, it is describing a decision that lives in one place: go/no-go. A firm does not become selective in the abstract. It becomes selective every time a BD lead looks at an RFQ and decides whether it is worth the team's week.
When healthy firms start bracing, the first lever they pull is not headcount. It is go/no-go discipline. They stop chasing marginal pursuits and concentrate on the ones they can win. Done well, that is exactly right. A slowing market rewards firms that pick sharper.
Done carelessly, it backfires.
The Selectivity Trap
Selectivity has a failure mode. If you get more selective without getting any faster at responding, you have not improved your pursuit strategy. You have just shrunk your pipeline and called it discipline.
Here is the trap. A firm decides to be selective, bids fewer pursuits, and still misses the deadline on half of the ones it chose, because assembling the response takes longer than the window allows. AEC firms already fail to respond to 10 to 19 percent of the qualified RFPs they receive. Being pickier does nothing about that number. It can make it worse, because a thinner pipeline means every miss hurts more.
The play is not fewer pursuits. It is tighter selection plus the capacity to fully answer everything you select. Choose harder, then respond to all of it. That combination is what turns a nervous market into a share-gaining one.
What to Do While the Backlog Is Still Full
The firms that come out of a soft patch stronger install their discipline while they can still afford to. Four moves, in order:
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Treat this as a go/no-go moment, not a hiring freeze. Delivery capacity is loosening: 33% turned down work for staffing this quarter, down from 51% two years ago. You likely have room to deliver more of the right work. The question is selection, so put your energy into the filter, not the org chart.
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Point pursuits at the sectors still running hot. ACEC members rate data centers (+87) and energy and utilities (+80) as the strongest markets. Most civil and infrastructure firms will not have data-center logos, but the civil, utility, power, and sitework scope around those campuses is real, reachable work. Map your qualifications to the scopes that are still funded, honestly.
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Audit what your pipeline is concentrated in. A pursuit-by-pursuit go/no-go can pass every test while the portfolio quietly stacks onto one softening sector or one uncertain funding source. With federal surface-transportation funding unresolved past September 30, correlated exposure is the thing to check before you need the answer.
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Make "go" mean "responded." Selectivity only produces wins if the pursuits you green-light actually go out the door, complete and on time. That means your qualifications, staff records, and project history have to be ready to assemble before the RFQ lands, not rebuilt from scratch each time. In a full market, a missed response is a statistic. In a bracing one, it is a client who stops inviting you.
The recession the survey worries about may not arrive. Firm finances are at +79 for a reason. But the move is the same whether the outlook turns or holds: select harder, and answer everything you select. That posture wins in the market that softens and the one that surprises you.
Frequently Asked Questions
Is the engineering industry slowing down in 2026?
Not yet by the numbers that measure today. In the ACEC Q2 2026 survey, firms rated their own finances at +79 and nearly half carried backlogs over a year. What softened is confidence about the future: the 12-month economic outlook turned negative and 46% put recession odds in the next six months. The concern is 2027, not this quarter.
What did the ACEC Q2 2026 sentiment survey find?
It found a split. Firms rated current finances and industry performance strongly, at +79 and +74, while confidence in the U.S. economy fell 26 points and the 12-month outlook went negative. ACEC summarized firms as "more selective, more cost-conscious, and more attuned to macro risks than at any point in the past year."
What does "more selective" mean for proposal strategy?
It means go/no-go discipline. Selectivity is decided one pursuit at a time, when a BD lead judges whether an RFQ is worth the team's week. In a bracing market, firms concentrate on pursuits they can genuinely win and pass on marginal ones, rather than chasing everything that circulates.
Should engineering firms chase fewer pursuits when the outlook weakens?
Chase fewer, answer more. Tighten go/no-go so you pursue only what fits, then respond fully to every pursuit that passes the filter. Being selective without the capacity to respond well just shrinks your pipeline. The winning combination is sharper selection plus the ability to complete every response you commit to.