The Trump Administration’s plans for infrastructure investment, regulatory reform, and tax relief have ignited a burst of enthusiasm among U.S. engineering firm leaders, propelling the American Council of Engineering Companies’ Engineering Business Index (EBI) to its largest ever quarterly increase.
The 4th Quarter 2016 (Q4/2016) EBI surged 5.1 points to 66.5, up from the 61.4 score of Q3/2016. The previous largest increase was 1.5 points between the Q1/2014 and Q2/2014 surveys. Any score above 50 signifies that the market is growing The EBI is a leading indicator of America’s economic health based on the business performance and projections of engineering firms responsible for developing the nation’s transportation, water, energy, and industrial infrastructure. The Q4/2016 survey of 317 engineering firm leaders was conducted November 31 to December 20.
Survey results show firm leader market expectations for one year from today rose a hefty 8.8 points to 72.1, the largest quarter-over-quarter increase since the EBI’s inception in January 2014. Expectations for both short- and long-term profitability also climbed. Firm leader optimism for improved profitability over the next six months rose 3.6 points to 69.0; increased to 72.9 for one year from now; and climbed 2.9 points to 70.5 for three years from now.
“We finally have a president who understands business!” says one respondent. “We’re looking forward to some significant tax relief with the new Administration,” says another.
The boost in firm leader optimism extends across almost the entire engineering marketplace. In public markets, transportation showed the strongest increase, up an eye-catching 9.5 points to 73.7.
All other public market sectors rose: Water and Wastewater (up 7.5, to 70.5), Education (up 3.2 to 58.2) Health Care (up 0.3, to 56.1), and Environmental (up 1.1 to 55.4). A new public sector category, Buildings, debuted at 65.2. Among the private client markets, firm leaders were most bullish about the Industrial/Manufacturing sector, which leaped up 12.5 points to 70.7. Four key private sector markets also climbed: Energy and Power (up 8.8, to 69.2), Land Development (up 8.2, to 68.4.), Buildings (up 4.1 to 67.0), and Education (up 5.2, to 58.5).
For the complete Quarter 4, 2016 Engineering Business Index, go to www.acec.org.
Related Stories
Market Data | Aug 10, 2018
Construction material prices inch down in July
Nonresidential construction input prices increased fell 0.3% in July but are up 9.6% year over year.
Market Data | Aug 9, 2018
Projections reveal nonresidential construction spending to grow
AIA releases latest Consensus Construction Forecast.
Market Data | Aug 7, 2018
New supply's impact illustrated in Yardi Matrix national self storage report for July
The metro with the most units under construction and planned as a percent of existing inventory in mid-July was Nashville, Tenn.
Market Data | Aug 3, 2018
U.S. multifamily rents reach new heights in July
Favorable economic conditions produce a sunny summer for the apartment sector.
Market Data | Aug 2, 2018
Nonresidential construction spending dips in June
“The hope is that June’s construction spending setback is merely a statistical aberration,” said ABC Chief Economist Anirban Basu.
Market Data | Aug 1, 2018
U.S. hotel construction pipeline continues moderate growth year-over-year
The hotel construction pipeline has been growing moderately and incrementally each quarter.
Market Data | Jul 30, 2018
Nonresidential fixed investment surges in second quarter
Nonresidential fixed investment represented an especially important element of second quarter strength in the advance estimate.
Market Data | Jul 11, 2018
Construction material prices increase steadily in June
June represents the latest month associated with rapidly rising construction input prices.
Market Data | Jun 26, 2018
Yardi Matrix examines potential regional multifamily supply overload
Outsize development activity in some major metros could increase vacancy rates and stagnate rent growth.
Market Data | Jun 22, 2018
Multifamily market remains healthy – Can it be sustained?
New report says strong economic fundamentals outweigh headwinds.