Based on EC&M’s 2023 Top 40 survey results (collected and tabulated in April), it’s fair to say things are definitely alive and well in the electrical design world. Coming off of last year, design engineering firms reported impressive revenue gains (13% higher than the previous year), strong hiring interest, and solid progress on the return to normalcy following the pandemic while still operating somewhat in recovery mode. This year, Top 40 firms shattered revenue expectations, pulling in $3.918 billion as a collective group (determined from 2022 data) — a 22% increase from the previous year’s results.
Let’s take a look at some highlights from this year’s survey to put this tidal wave of growth into perspective. After two years of rather subdued activity during the pandemic, Top 40 firms and their clients obviously kicked into high gear in 2022, making up for lost time and capitalizing on what had become a considerable backlog of work. One of the most powerful stats coming out of this year’s results that immediately jumped out to me is the fact that 37 out of 40 firms making the Top 40 list maintained their revenue level from the previous year while nearly all reported gains. If you take out the two firms that made the list for the first time this year (they had no historical data to compare to), that leaves only one firm reporting a decline! I can confidently say that this has never happened before in the history of our survey, which dates back to the mid 2000s. Another noteworthy finding is 91% of firms rated the 2022 business climate as “strong” — a dramatic shift in sentiment from 57% in 2022 and 30% in 2021. Read the full special report, written by Freelancer Tom Zind for more analysis and to view the complete rankings table.
Now for the million dollar question: How long can these good times last? The answer varies, depending on whom you talk to and which source you cite. I feel like we’ve been bracing for an “imminent” recession forever, yet there’s still no consensus on whether or not it’s actually arrived. Inflation did hit a 40-year high in 2022, and interest rates continue to rise, resulting in a tightening of credit. The job market remains strong at the moment with relatively low unemployment. Add in a few bank failures and a near default on the U.S. debt ceiling (the Senate approved a measure on June 2, 2023 that will suspend the nation’s debt limit through Jan. 1, 2025), and you’ve got the makings for one complicated economic forecast.
According to survey results released from the ACEC Research Institute (the independent research arm of the American Council of Engineering Companies) on June 9, the outlook for the overall economy is improving among the nation’s leading engineering firms as CEOs are “extremely optimistic” for strong economic performance in 2023.
“Today’s report is good news for our industry and good news for the nation’s economy. The long-term federal investments in American infrastructure and manufacturing are surely a large reason why these engineering leaders are so optimistic,” said ACEC President and CEO Linda Bauer Darr in the press release. “America’s engineering industry serves a broad spectrum of our economy, from transportation and water to energy, housing, industrial and manufacturing facilities, health care and more. If these firms are busy now and hopeful for the future, that’s a good indication that the broader economy is moving in a positive direction.”
Fingers crossed these good times continue to roll.
