With the rate of coronavirus spread decelerating across the US and as businesses continue to adapt their operations to function during the pandemic, the US economy continues to gradually improve. Indeed, the consensus among economists — such as this concise summary from the Conference Board — is that the US GDP will only shrink by 3.8% this year, a big improvement from the 7.0% decline predicted in July. The current outlook continues to envision a “swoosh”-shaped recovery, with slow but steady progress in each consecutive month after the steep declines of March and April.
This improvement is partially reflected in the outlook of engineering staffing firms. Since March, our monthly Pulse report has tracked the net percentage of engineering firms that expect new orders to increase in the next six months. As shown in the graph below, from a low of net -28% of firms in March forecasting new orders to grow in the upcoming half year, the figure has grown steadily each month, reaching net +43% of engineering firms in July. Additional selected findings from the August Pulse Survey can be found here.
Click on chart to enlarge.
While this improvement in outlook may not significantly affect revenue growth in 2020, it bodes well for a recovery in 2021.
While SIA forecasts that US engineering staffing firm revenue will decline 15% this year (a figure that is consistent with our July Forecast report), we project that engineering staffing revenue will grow 12% in 2021 compared to 2020. This recovery is tied to the potential for a Covid-19 vaccine early next year and the expected growth in new orders. For more details on our projection, see our US Staffing Industry Forecast: September 2020 Update and corresponding webinar presentation.
For additional metrics and color on growth in the engineering staffing segment, we invite staffing firms to participate in our US Staffing Industry Pulse Survey. For information on taking part in the next survey, contact SIA Research Analyst Curtis Starkey at cstarkey@staffingindustry.com.
