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ACEC Engineering Business Index – 4th Quarter 2015

Posted by Content Coordinator on Tuesday, January 5th, 2016

AMERICAN COUNCIL OF ENGINEERING COMPANIES

Firm Leader Confidence Again on Upswing

With rising firm leader confidence in market conditions, profitability, and backlog, the 4th Quarter ACEC Engineering Business Index (EBI) climbed to 63.1, up from 62.4 in the 3rd Quarter.

EBI is a diffusion index that charts the health of the engineering industry by consolidating senior leadership responses on market and firm performance into a single composite score. Any score above 50 indicates a growing market.

Turned a Corner

Over the past year, CEO expectations for long-term profitability and growing backlog had fallen steadily, but that sentiment reversed in the latest survey.

ACEinC Business Index

Profitability expectations for three years from now surged from 60.7 to 68.7, backlog expectations for one year from now jumped from 62.3 to 66.9, and confidence in the business climate one year from now moved ahead from 62.8 to 67.1.

“With the continued overall economic growth, we’re seeing a steady increase in opportunities in our markets,” said one respondent.

Public Markets Rebounding

A big factor behind the jump in CEO sentiment was the passage of the five-year $305 billion surface transportation program. Twelve-month growth expectations for the Transportation market, which has languished for years due to the Federal Government’s failure to provide long-term funding, leaped from 58.4 to 70.1.

“This reauthorization is huge for us,” said one respondent.

Scores for several other public markets also rose, with Education jumping from 50.0 to 57.9, Health Care climbing from 56.4 to 59.3, and Environmental moving up from 54.8 to 55.5. Only the Water and Wastewater sector fell in the fourth quarter, down from 64.2 to 62.9.

Many respondents noted that state and municipal efforts to fill the gaps in federal infrastructure funding are gaining traction.

“Transportation funding was passed in Michigan and there is also an asset management program funded by the state that will help the water and wastewater industry,” said a respondent.

ACEC Business Index Q4 2015 FAST Act

Download full version (PDF): ACEC Engineering Business Index – 4th Quarter 2015

American Council of Engineering Companies (ACEC)About the American Council of Engineering Companies
www.acec.org
The American Council of Engineering Companies (ACEC) is the voice of America’s engineering industry. Council members – numbering more than 5,000 firms representing more than 500,000 employees throughout the country – are engaged in a wide range of engineering works that propel the nation’s economy, and enhance and safeguard America’s quality of life. These works allow Americans to drink clean water, enjoy a healthy life, take advantage of new technologies, and travel safely and efficiently. The Council’s mission is to contribute to America’s prosperity and welfare by advancing the business interests of member firms.

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