Engineering Services NAICS 541330

Jun 23, 2026 - Construction Industry Confidence Holds Steady in Q2

• Construction industry confidence held steady in the second quarter, with Engineering News-Record's (ENR) Construction Industry Confidence Index remaining at 54 and its Economic Index staying at 48 for a third consecutive quarter. Index readings of 50 or more suggest a healthy industry. Executives reported weaker views of the current market but slightly improved expectations for the next 12 to 18 months. General contractors and construction managers were the most confident, while design firms improved and subcontractors slipped. Larger firms remained more optimistic than smaller ones. More than 75% of ENR respondents reported upward price pressure. Industry watchers suggest inflation, higher rate expectations, and materials costs are weighing on contractors, though strong demand, especially for data centers, continues to support the market.
• The Associated Builders and Contractors (ABC) Construction Backlog Indicator rose by 0.3 months to 9.1 months in May 2026 compared to April. The infrastructure backlog increased by 0.2 months to 10.1 months in May from the previous month, and the heavy industrial backlog rose by 0.9 months to 10 months over the same period. May’s commercial and institutional construction backlog decreased 0.1 months to 8.8 months compared to April. The ABC’s Construction Confidence Index for sales fell to 61.1 in May from 66.2 in April. A Confidence Index sales reading of 50 or more indicates most contractors are optimistic about sales. ABC Chief Economist Anirban Basu said that while May backlogs reached nearly a three-year high, backlog growth is increasingly concentrated among large contractors working on data centers. The drop in contractor confidence in May, despite the overall increase in the backlog index, highlights the disproportionate benefits of data center growth for larger contractors.

• According to Engineering News-Record, leaders of the House Transportation and Infrastructure Committee released a roughly $580 billion proposal, the BUILD America 250 Act, to guide federal transportation investment through fiscal 2031 after the 2021 Infrastructure Investment and Jobs Act (IIJA) expires. The bill emphasizes formula funding, with more than 90% of highway funds distributed that way, aiming to speed project delivery and give states greater flexibility. Industry groups support the predictability but question whether it preserves IIJA-era funding certainty. About $474.4 billion would come from Highway Trust Fund authority, while $106 billion would rely on future appropriations, according to analysis by law firm Holland & Knight. The proposal would also eliminate some climate programs, add fees on electric vehicles, and raise review thresholds to streamline approvals, while economists caution that private financing cannot replace sustained federal spending.
• AI adoption is reshaping engineering services as product developers seek faster design iteration, earlier identification of system issues, and scalable engineering knowledge, according to TechRadar. Despite significant investment, many teams struggle to move beyond pilot programs, often because of unrealistic expectations that AI can replace core design tools. Instead, AI is proving most effective as an enhancement to existing CAD and CAE systems, enabling a shift toward “quantitative design,” in which engineers define parameters and let AI generate and evaluate multiple design options. Emerging AI copilots and an added intelligence layer help reduce manual work, improve decision-making, and surface trade-offs earlier in the process. For the engineering services industry, this shift can accelerate project timelines, improve efficiency, and expand design exploration, while preserving the importance of human expertise and judgment in outcomes.