After another banner year, EC&M’s Top 50 Electrical Contractors (see special report) are moving through 2025 with confidence and caution. In 2024 (the full year in which this year’s rankings are based), the collective group pulled in revenues of $59.5 billion, a 15% jump from the prior year marked by a long streak of growth fueled by data centers, energy infrastructure, and manufacturing projects. But as the industry looks forward, mounting economic and policy headwinds — chief among them tariffs — threaten to chip away at margins and potentially disrupt projects in the pipeline.
When it comes to translating the ramifications that may come from the unpredictable tariff situation, I asked Alex Chausovsky, Director of Analytics and Consulting at the Bundy Group, to put the data into perspective for the EC&M audience. In this feature, he does an excellent job of explaining the impact of economic policy uncertainty on the electrical industry specifically.
The Trump administration’s aggressive trade stance has arguably triggered the most significant wave of uncertainty the market has experienced since the pandemic. As Chausovsky points out, tariffs on steel, aluminum, and copper (bedrock materials for the electrical market) are pushing up material costs at a time when electrical contractors are already contending with inflation and ongoing skilled labor shortages. In fact, according to the Associated General Contractors, tariffs now total roughly 30% on all imports from China, alongside duties ranging from 25% to 35% on Canadian and Mexican goods (unless USMCA-compliant). Products essential to our industry, such as steel, wire, cable, and conduit, are obviously fully exposed to these higher rates.
As Chausovsky notes in his analysis, estimates suggest the effective tariff rate on imports could settle between 15% and 20%, virtually guaranteeing sustained upward pricing pressure through 2025 and into 2026. For electrical contractors trying to bid and secure projects months or years in advance, these shifting cost dynamics could complicate profitability and risk management. Top 50 survey data underscores this unease. Three-quarters of Top 50 contractors expect tariffs to have a negative impact on their businesses in 2025, and two-thirds anticipate moderate increases in materials prices as a result. Identified by the Top 50 as materials experiencing the greatest prices increases, wire, cable, and distribution equipment are already seeing noticeable increases, and project delays tied to value engineering and material availability continue to be on the rise. While many firms say the industry has weathered similar storms during the pandemic-era supply chain crunch, the tariff factor is forcing renewed creativity in procurement strategies, contract structures, and supplier relationships for electrical professionals.
The broader macroeconomic picture offers little relief. Headline inflation is climbing, the Federal Reserve is unlikely to lower rates soon, and capital spending indicators are flashing caution, notes Chausovsky. Electrical contractors are feeling this firsthand. While nearly nine in 10 said 2024 was a strong business year, fewer expect 2025 revenues to exceed expectations — a steep drop from last year’s optimism. Despite a certain degree of looming uncertainty, the overall market outlook seems bright. Data centers, boosted by artificial intelligence, continue to dominate as the hottest market among Top 50 Electrical Contractors with health care, renewable energy, and education also staying strong. Larger contractors with diversified portfolios and national reach are better positioned to absorb cost volatility and redirect resources into more resilient markets. The industry’s growing embrace of technology — specifically cost and time savings recouped from AI — is also providing efficiency gains and competitive advantages that could counteract some of the cost pressures initiated by tariffs. Based on this year’s Top 50 survey results, it looks like the short-term outlook is one of cautious growth and optimism. Although opportunities are there for the taking, margins will likely remain under strain, and delays may test patience. There’s no doubt that electrical contractors who can stay nimble — sharpening procurement practices, adopting flexible contracts, and doubling down on high-demand sectors — will be better positioned to keep the industry’s growth streak alive.
