To begin 2024, US engineering temporary staffing has performed quite strongly relative to the US staffing industry as a whole. In SIA’s US Staffing Industry Forecast: March 2024 Update report, engineering was one of the few segments that was forecast to see mid-single-digit growth this year amid an expected broader industry downturn.

This forecast was reinforced by results from our most recent US Staffing Industry Pulse Survey Report: May 2024 Selected Highlights. In aggregate, engineering staffing firms reported year-over-year revenue growth of 1%, with median expansion of 3%. In addition, a net 21% of such firms reported positive year-over-year revenue growth. A net 14% of engineering staffing firms saw increasing bill rates, and a net 13% saw new orders over the last three months. Looking ahead six months, a net 29% expect increasing bill rates and a net 25% anticipate increasing new orders.

Demand for engineering staffing has been sustained by a number of bills that allocate significant funding to boost domestic infrastructure and manufacturing in the transportation, telecom, construction and energy industries. However, funding from these sources has flowed slowly, due in part to uncertainty around particular stipulations in the legislation.

For example, to qualify for a 500% increase in tax credits via the Inflation Reduction Act of 2022, contractors must meet prevailing wages as defined under the Davis-Bacon Act, ensure that a certain percentage of work is performed by qualified apprentices (15% after Jan. 1, 2024), and to maintain a 1-to-4 apprentice-to-journeyman ratio in order along with proper record-keeping and reporting. Some companies have shown hesitancy to move forward with projects until they have more clarity about whether they will qualify for the higher tax credits available through this legislation. Even with a final ruling on this legislation published on June 25, some companies may pull back from participation as these requirements and their reporting are too onerous.

This hesitancy among clients dovetails with results from our Pulse survey, in which staffing companies described the biggest challenges their firms are currently facing. Engineering firms cited two key issues as their biggest challenges:

• Uncertainty about the economy, about the coming US election and among their clients
• Difficulty with engaging, gaining and retaining good clients

These issues are almost certainly connected, with uncertainty among clients influencing their decisions when it comes to investing in workforce solutions.

Because engineering staffing touches all aspects of the economy, it can be helpful for firms that are looking to identify potential new or active clients to target industries with a high need for engineers that are also performing well. SIA’s Engineering Staffing Global Market Assessment 2024 report includes a breakdown of industries that are major employers of engineers based on data from the BLS.

The industries that employ the largest numbers of engineers on a regular, full-time basis are engineering services, government (federal, state, and local) and electronic product manufacturing. Machinery manufacturing, construction, R&D and trade, transportation, and warehousing together account for another 20% of engineering employment (about 5% each). Of these industries, temporary staffing agencies have cited the energy sector — traditional oil and gas, renewables and power transmission and distribution — and advanced manufacturing, particularly of food, medical devices and semiconductors as areas with strong growth in 2023 and into 2024.

Along with ongoing hesitancy about tax incentives in key legislation, the most recent information from the US Bureau of Economic Analysis helps explain some of the uncertainty and sales difficulty reported by engineering staffing firms. While government spending remains high, particularly at the state and local levels, and manufacturing of many goods — from computer/electronic products and other machinery to food, chemicals and pharmaceuticals — remains strong, corporate profits across the key energy industry lagged at the end of 2023 and into 2024.

Source: US Bureau of Economic Analysis First Quarter 2024 GDP Release

To receive up-to-date data about trends in engineering staffing on an ongoing basis, participate in our bi-monthly Pulse survey. More information is available on the surveys page.