In the ACEC Research Institute's Q3 2026 sentiment survey, 591 engineering executives rated their own firm's finances at +79 and the industry at +76, while rating the U.S. economy twelve months out at −8. Firms are confident about themselves and negative about the market they sell into. That gap is a pursuit signal.
The architecture billings index pointed the same direction earlier this year. One measures the supply of design work forming, the other how the people running firms feel about what is coming. Both are describing your 2027 pipeline, not your 2026 backlog.
This page tracks the ACEC quarterly study. The figures below are from the Q3 2026 release of August 27, 2026, drawn from 591 responses fielded July 28 to August 10. They stand until the Q4 study publishes.
What the ACEC Q3 2026 Survey Found
The headline is a contradiction that resolves the moment you separate today from next year. The healthy half is consistent with what mid-market design firms reported on margin earlier this year.
| Firms look healthy now | Firms are bracing for later |
|---|---|
| Firm finances rated +79, unchanged from Q2 | The U.S. economy twelve months out sits at −8, down from −6 |
| Industry performance rated +76, up from +74 | 41% put recession odds inside six months, down from 46% |
| Nearly half carry backlogs over a year, median 12 months | Inflation concern rose 14 points year over year to +58, with 72% reporting significant concern |
| Sentiment on the economy today rebounded 13 points, to +32 | Sector strength is narrowing: Data Centers +83, Water/Wastewater +82, and performance "more uneven" elsewhere |
Read the two economy rows together. Firms feel much better about the economy today than in the spring, up 13 points, and slightly worse about it a year out. That is a market that has stopped worrying about this quarter and started worrying about the far end of its own backlog. Joe Bates of the ACEC Research Institute names the shape directly: "An ongoing trend we have found which is even more acute this quarter is the gap between how firms feel about their own businesses versus the broader economy."
Firms Are Hiring Hard Into a Negative Outlook
The number that moved most is the one about staff. 88% of firms report at least one open position, 65% expect to increase hiring over the next twelve months, and the net hiring index sits at +59, up seven points year over year.
Put that beside the −8. Firms are staffing up against a market they expect to weaken. That can be rational, because you hire for the backlog you have rather than the economy you fear. But it leaves payroll growing while the forward view is not, and every hire raises the amount of work the firm has to win to stay level.
It also raises it in a lopsided way. An open engineering position is a delivery hire, not a proposal hire. Filling it increases what you have to win without increasing your ability to chase it.
What a Negative 12-Month Outlook Means at the Pursuit Desk
A firm does not brace in the abstract. It braces one decision at a time, every time a BD lead looks at an RFQ and judges whether it is worth the team's week. And when healthy firms read a softer year ahead, the lever they pull is not headcount. The hiring numbers say that one is already pulled. It is go/no-go discipline: stop chasing marginal pursuits, concentrate on the ones you 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 selection problem, not a hiring problem. Nearly nine firms in ten already have a position open. Adding another does not change which pursuits you chase, or how many of them you can actually answer. Put the energy into the filter, then into what your current staff can support.
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Point pursuits at the two sectors still clearly running. ACEC rates Data Centers at +83 and Water/Wastewater at +82, and says performance is becoming more uneven across everything else. Most civil firms will not have data-center logos, but the civil, utility, power, and sitework scope around those campuses is reachable work. The water lane is more reachable still: WRDA and the state revolving funds put municipal work in front of firms already doing it. 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 authorization unresolved past September 30, 2026, 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 go out the door complete and on time. That means qualifications, staff records, and project history ready to assemble before the RFQ lands, not rebuilt 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. The odds firms put on it actually fell this quarter, from 46% to 41%. 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 by the numbers that measure today. In the ACEC Q3 2026 survey, firms rated their own finances at +79 and industry performance at +76, nearly half carried backlogs over a year, and 88% had at least one open position. What softened is the view of next year: the U.S. economy twelve months out sits at −8. The concern is 2027, not this quarter.
What did the ACEC Q3 2026 sentiment survey find?
A widening split, across 591 responses fielded July 28 to August 10, 2026. Confidence in the firm's own finances held at +79 while the 12-month economic outlook fell to −8. Sentiment on the economy today rebounded 13 points to +32, and recession odds eased from 46% to 41%.
Are engineering firms still hiring in 2026?
Yes, and harder than a year ago. ACEC's Q3 2026 study puts the net hiring index at +59, up seven points year over year, with 88% of firms reporting at least one open position and 65% expecting to increase hiring over the next twelve months. Firms are staffing up even as their 12-month economic outlook stays negative.
Which engineering markets are strongest right now?
Data Centers, at +83, and Water/Wastewater, at +82, in ACEC's Q3 2026 sector sentiment. ACEC describes performance as becoming more uneven across other sectors, which makes concentration worth checking. Both leaders have adjacent scope that civil and municipal firms can reach without owning the headline project type.
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.