Engineering Firm Leader Confidence in Future Marketplace Plateaued
The first quarter 2017 (Q1/17) of ACEC’s Engineering Business Index (EBI) dipped slightly (0.5 points) to 66.0. The decline is minimal and the score remains decidedly positive, but is in contrast to the 4th quarter 2016 EBI in which the score jumped 5.1 points—the largest quarterly increase in the survey’s three-year history. Engineering firm leader confidence seems to have plateaued.
The EBI is a leading indicator of America’s economic health and is based on the business performance and projections of U.S. engineering firms that develop the nation’s transportation, water, energy and industrial infrastructure. The EBI is a diffusion index. The index mean is 50, with scores above 50 indicating business expansion, and scores below 50 indicating contraction. The Q1/17 survey was conducted March 23 to April 24 of 378 U.S. engineering firm leaders.
When comparing today’s market conditions to six months ago, the EBI score climbed 3.2 points to 66.8, while current backlog compared to six months ago was up a strong 5.1 points to 67.1. Additionally, short-term (six months) expectations for profitability increased 3.5 points to 72.5 points.
Other EBI results reflect engineering leader marketplace ambiguity. Market expectations for one year from today fell 2.6 points to 69.5 and profitability expectations for the same period were flat (72.9). Looking out three years, expectations fell 2.4 points, and anticipated backlog fell 1.1 points to 70.4.
Concerns about long-term marketplace health resulted in significant declines in nine of the 12 primary public and private sector engineering markets.
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