April 10, 2025
NEMA Confidence Index Plummets On Tariff Concerns
Fear hanging over the industry isn’t just about prices. It's about what comes next.
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.
This latest NEMA survey, conducted March 10 through 25, captures a snapshot from what already feels like a different world. At the time, 25% tariffs between the U.S., Mexico and Canada were still looming — a scenario that never materialized. And yet, just days after the survey closed, new elevated tariffs on Chinese goods did hit, adding fresh fuel to an already jittery market.
The result? Confidence didn’t just dip. It plummeted. And the fear hanging over the industry isn’t just about prices. It was about what comes next.
This most recent ECBI shows how makers of electrical equipment view current and future market conditions. Below are the details:
Sentiment pulls back sharply
The current conditions component sharply declined to 21.4, following a previous value of 61.5 in February. Panel members reported a more negative outlook, with only 7 percent indicating that current conditions were "better," down from 38 percent last month. Nearly two- thirds of respondents, 64 percent, felt conditions were "worse," while 29 percent considered them "unchanged."
Panelists continued to express concerns about the ongoing uncertainty surrounding the administration's potential tariffs impact on their business, which is contributing to the overall pessimistic view.
The median value for the magnitude of change in current conditions dropped to –1.0, with the mean falling to –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 also saw a significant decrease, dropping to 28.6, compared to 69.2 in February. Looking ahead, only 21 percent of panelists expect "better" conditions over the next six months, while 64 percent predict "worse" conditions, and 14 percent anticipate that conditions will remain "unchanged." The ongoing uncertainty about the potential impact of the administration's tariffs and policies continues to dominate panelists' outlooks, with many expressing caution about what the future holds for 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 March10-21, 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)
