March 10, 2025
NEMA Survey Shows Confidence Wanes as Tariff Concerns Rise
Strong market, shaky confidence — business is steady, but nerves are not.
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.
Optimism is a fragile thing. One month, confidence surges; the next, it wobbles. February’s conditions index slipped to 61.5, a noticeable dip from January’s 68.8, as panelists weighed a strong market against lingering uncertainty.
Nearly four in ten still saw improvement, but fewer than before. The real tension, though, lies in the future — expectations for the next six months fell sharply, dragged down by unease over the new administration’s tariff policies. Business remains steady. Confidence? Less so.
This most recent ECBI shows how makers of electrical equipment view current and future market conditions. Below are the details:
Sentiment softens but remains in positive territory
The current conditions component eased to 61.5, following a rise to 68.8 in January. Panel members maintained a generally positive outlook, with 38 percent reporting that current conditions were "better," compared to 44 percent last month. Additionally, 46 percent described the conditions as "unchanged," while 15 percent felt they were "worse." Consistent with recent months, panelists highlighted a strong market but expressed continued uncertainty regarding the new administration's tariffs.
The median value for the magnitude of change in current conditions remained at 1.0, while the mean was +0.5.
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 decreased to 69.2 this month, down from 78.1 in January. Over half, 54 percent, of panelists expected "better" conditions in the next six months, while 31 percent anticipated conditions will remain "unchanged," and 15 percent foresaw "worse" conditions. Continued uncertainty about the potential impact of the new administration's tariffs and policies led some panelists to express caution and uncertainty over the potential impacts on business.
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 February 10-21, 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)
