May 13, 2025
NEMA Outlook Caught Between Pessimism and Cautious Hope
Mixed outlook reveals industry divided on recovery prospects
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.
Sentiment across the electroindustry slipped further into negative territory in April, as companies reported no signs of improvement in current business conditions. With two-thirds of survey respondents indicating worsening conditions and none reporting improvement, the data reflect a deeply cautious mood shaped by ongoing uncertainty, particularly around tariffs and broader economic policy. The latest reading marks a continued decline and suggests that near-term headwinds are weighing heavily on business activity and confidence.
Yet despite the bleak present, outlooks for the next six months offer a more balanced picture. The Future Conditions Index rebounded sharply to a neutral 50.0, signaling an industry split between hope for stabilization and concern that current challenges could persist. This divergence highlights an inflection point: while the present is marked by contraction, many leaders are cautiously optimistic that today's turbulence may give way to steadier footing later in the year—provided that macroeconomic and policy uncertainties begin to resolve.
This most recent ECBI shows how makers of electrical equipment view current and future market conditions. Below are the details:
The Current Conditions Index declined again in April, falling to 16.7 from 21.4 in March, indicating continued deterioration in sentiment.
None of the panelists reported improved conditions, while 67% said conditions were “worse,” and 33% reported them as “unchanged.” Ongoing uncertainty and concerns about the impact of tariffs remained the dominant issues cited by panelists.
The median value for the magnitude of change in current conditions dropped to –1.0, with the mean falling to –1.6.
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 Index rose to 50.0 in April from 28.6 in March, reflecting a more balanced but cautious outlook. Panelists were evenly split, with 50% expecting “better” conditions six months from now and 50% anticipating “worse” conditions six months from now. Comments were mixed but somewhat optimistic and hopeful that the recent unrest would be resolved in six months. Still, uncertainty remained high, particularly regarding the long-term impact of tariffs and ongoing policy shifts.
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 April 14-25, 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)
