4boards

Engineering firms are operating in what should be a fucking golden age. Backlogs are strong. Revenue is growing YoY. Infrastructure spending is accelerating. Governments are talking about reshoring supply chains, rebuilding domestic industrial capacity, securing critical minerals, expanding energy infrastructure, and preparing for a more fragmented, post-globalized world.

All of that should be an absolute dream for engineering consultants. Instead, the stocks are getting fucking annihilated. Jacobs. AECOM. Tetra Tech. AtkinsRéalis. WSP. Stantec. The market is increasingly pricing these companies as if the engineering profession itself is being structurally destroyed.

And the bear case is brutally simple:

>AI attacks the fundamental unit economics of engineering consulting: billable human hours.
>These businesses have historically grown by hiring more engineers, billing those engineers out at a markup, and increasing rates over time.
>If one engineer with AI can do the work that previously required three engineers (and the market is betting it can), the client isn't going to let the consultant keep billing for three people.
>Then every engineering firm has to compete for the same work by cutting rates.
>Utilization becomes less important because there simply aren't as many hours to sell.
>And suddenly the industry's biggest asset, its enormous engineering workforce, starts looking like a massive cost base.

I've also heard internally that WSP is considering significantly lowering rates in 2027, with greater reliance on AI tools and outsourcing, including work performed in India. If they are succesful, its fucking OVER for engineering. It's a slow-motion deterioration of the profession:

The end game: low salaries, limited opportunities for new graduates, another formerly 'good' career which is now shit.

NFT

#0654

Status

AVAILABLE

Random mint

$2.00 in SOL

Replies

15 / 0 images

[View Thread] [Mint Random]