AI, Infrastructure Funding and Talent Scarcity Define the Next Cycle
Demand for engineering and consulting (E&C) services is being shaped by three forces arriving at once: generational AI infrastructure investment, the peak spending phase of the Infrastructure Investment and Jobs Act (IIJA) and a new wave of federal water mandates. At the same time, the technical talent needed to deliver that work is growing scarcer, pushing firms to invest in AI tools and pursue acquisitions to add capacity.
For owners and investors, the result is a market that rewards scale, specialization and preparation. Buyers remain active but increasingly selective, and Baird's transaction data shows they reserve their highest valuations for platforms with a specific set of quality traits. The October 2026 E&C Market Update from Baird's Facility, Industrial, Residential & Environmental Services (FIRE) team outlines four themes shaping the sector.
AI Investment Is Expanding the E&C Opportunity The data center buildout is creating demand well beyond construction. Explore the opportunity across power, infrastructure and ongoing maintenance.
Infrastructure Funding Is Extending the Demand Runway Federal infrastructure spending and evolving water requirements are supporting new project activity. See what these drivers mean for E&C firms.
Talent Constraints Are Accelerating AI Adoption Scarce technical talent is pushing firms to rethink how they build capacity. The report examines the roles of AI adoption and acquisitions.
Quality Is Driving Premium Valuations Selective buyers are placing greater value on differentiated platforms. Discover the four characteristics highlighted by Baird’s proprietary transaction analysis.
Explore Baird’s September 2026 Engineering & Consulting Market Update for the data, analysis and implications behind these themes.
