February 11, 2025
Industry Confidence Grows, But Tariff Uncertainty Looms
NEMA survey panelists report strong orders but brace for tariff-driven disruptions
Each month, the National Electrical Manufacturers Association (NEMA) publishes the Electroindustry Business Confidence Index (EBCI). The index is based on surveys of senior managers at NEMA member companies – designed to gauge the business environment of the electroindustry in North America. Member companies include most of the ten largest lighting manufacturers in North America, along with other manufacturers of lighting, electrical and medical imaging products.
The latest survey, conducted from January 13 to January 24, 2025, reflects a notable rebound in confidence for both current and future conditions. This period includes President Trump’s inauguration on January 20, when tariff discussions were postponed to February 1.
While the index surged from 50 in December to 68.8 in January, optimism was tempered by concerns over potential economic and trade policy shifts under the new administration. Those concerns have come to fruition in the first two weeks of February with multiple new tariff measures, which will likely cause the next EBCI report to reflect caution amid the current climate of cost increases and uncertainty.
This most recent ECBI shows how makers of electrical equipment view current and future market conditions. Below are the details:
Current and future components rebound in January
After declining to 50 in December, the electroindustry business confidence index current conditions component rebounded to 68.8 in January. Overall, panel members shared a positive outlook, with 44 percent reporting that current conditions were “better” compared to last month, 50 percent indicating “unchanged” conditions, and 6 percent noting that current conditions were “worse.” Panelists' comments were generally positive with many citing strong orders, but with caution due to market uncertainty about the new administration’s economic and tariff policies.
The median value for the magnitude of change in current conditions increased to 1.0, after decreasing to 0.0 last month, while the mean was +0.8.
Panelists are asked to report the magnitude of change on a scale ranging from –5 (deteriorated significantly) through 0 (unchanged) to +5 (improved significantly).
The future conditions component continued to indicate positive expectations. After slipping to 67.9 in December the index rose to 78.1 in January, approaching the 80s range seen over the previous six months. Nearly two-thirds, 63 percent, of panel members anticipated "better" conditions in the next six months and 31 percent anticipated “unchanged” conditions. The remaining six percent predicted “worse” conditions six months from now. Comments on future business conditions were generally optimistic, with panelists forecasting a strong year ahead, though some expressed uncertainty due to potential tariffs.
SURVEY RESULTS:
- Values reflect the percentage of respondents expecting "Better" conditions, plus one-half of the percentage of respondents expecting "Unchanged" conditions.
- A score of 50 or higher suggests conditions appropriate to expansion of the electroindustry sector.
- Please note that survey responses were collected from the period of January 13-24, 2025.
EBCI METHODOLOGY:
The EBCI indexes are based on the results of a monthly survey of senior managers at NEMA member companies and are designed to gauge the business environment of the electroindustry in North America (defined here as the United States and Canada).
The survey contains the following questions:
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How would you rate current economic conditions in North America, as they affect your business, compared to the previous month?
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Using the following scale, please describe the magnitude of change in economic conditions in North America this month compared to economic conditions last month? [Scale structured as follows: 5 (improved significantly), 4, 3, 2, 1, 0 (stayed the same), -1, -2, -3, -4, -5 (deteriorated significantly)]
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How do you expect economic conditions in North America, as they affect your business, to have changed six months from now?
Respondents are asked to indicate whether conditions are better, worse, or unchanged. The survey also provides space for respondents to comment on current conditions. These comments are included below the table containing the index levels.
The index value is the percentage of respondents expecting “Better” conditions, plus one-half of the percentage of respondents expecting “Unchanged” conditions, which follows the methodology used by the Institute for Supply Management (ISM; formerly the National Association of Purchasing Management) in the construction of their manufacturing index.
Reprinted by permission of the National Electrical Manufacturers Association (NEMA)
