Engineering Services NAICS 541330

Nov 21, 2025 - Continuing Resolution Slows Federal Agency Projects

• The 43-day federal shutdown, the longest in U.S. history, ended November 12, but construction industry disruptions persist, according to Engineering News-Record. Infrastructure agencies, including the Department of Transportation, the Environmental Protection Agency, and the Army Corps of Engineers, remain under a continuing resolution through January 30, 2026, which limits spending, staffing, and new program starts. Contractors are facing mounting delays in grant agreements, environmental reviews, and permit approvals, particularly for transportation, water, and civil works projects. Inflation and seasonal timing compound risks, as procurement delays may drive up material costs. Public owners must still meet Infrastructure Investment and Jobs Act deadlines despite slowed federal processing. The reopening offers a path forward, but recovery will be gradual, requiring strategic planning across the construction sector to manage uncertainty and maintain momentum.
• The Associated Builders and Contractors (ABC) Construction Backlog Indicator declined by 0.1 months to 8.5 months in October compared to September. On a year-over-year basis, October backlogs were flat. The infrastructure backlog increased by 0.3 months in October to 9.8 months, up from 9.5 months in September, and was 0.9 months higher than in October 2024. October's commercial and institutional construction backlog remained flat in both month-over-month and year-over-year comparisons. The heavy industrial backlog increased by 1.2 months to 8.8 months in October, compared to September, and was up 0.7 months year-over-year. The ABC’s Construction Confidence Index for sales remained unchanged at 59.6 in October. A Confidence Index sales reading of 50 or more indicates most contractors are optimistic about sales. ABC Chief Economist Anirban Basu said, "Nearly 65% of contractors indicated that they think the U.S. construction industry is contracting. This dismal assessment accompanied the lowest backlog reading since May, and 23% of contractors expect their sales to decline over the next six months, the highest share in over a year."

• North American construction and engineering spending in 2025 is expected to decline 1% after increasing an estimated 6% in 2024, according to FMI’s fourth-quarter 2025 North American Engineering and Construction Outlook. With a rise of 12%, the sewage and waste disposal sub-sector will lead 2025 nonresidential construction spending growth, followed by religious (10%), water supply (+7%), conservation and development (+5%), amusement and recreation (+4%), public safety (+4%), and transportation (+4%). However, power, highway, and street construction spending is expected to be flat in 2025.
• A new Volcker Alliance report warns that inconsistent and incomplete disclosure of deferred-maintenance liabilities by state governments is masking the accurate scale of U.S. infrastructure decay, estimated at $1 trillion, according to reporting by Engineering News-Record. The study, developed with the University of Minnesota and Pew Charitable Trusts, highlights wide disparities in how states report and manage maintenance needs, with about 20 states lacking public accounting. California and Massachusetts offer detailed inventories, while others, like Oklahoma, do not consolidate data. Pew estimated that state and local governments have about $105 billion in deferred maintenance for roads and bridges, and more than 30 states have a combined $86.3 billion in estimated shortfalls by 2035. The backlog has surged to $370 billion at the federal level, prompting the GAO to flag “Building Condition” as a high-risk issue. Without standardized data, policymakers struggle to prioritize investments, leading to preventable failures and rising costs.