Inflation Is High In Lighting Manufacturing

Electric lighting equipment Producer Price Index (PPI) trends show a steady, inflation-linked trajectory with ongoing cost increases due to tariffs, other input costs, and supply chain shifts. The PPI for lighting has increased almost 30% since the pandemic, and continues to rise quickly. This corresponds to an annual industry inflation rate of nearly 6% (CAGR).

Trends in the PPI for the Electric Lighting Equipment Manufacturing industry:

• Broad escalation since early 2020s: The PPI for electric lighting equipment has steadily trended upward, reflecting higher costs across components, materials, and logistics, with periodic accelerations tied to supply disruptions and energy-price movements.
• Sub-sector variation: Within the broader category, sub-segments such as nonresidential lighting fixtures and lamps exhibit distinct trajectories. Nonresidential electric lighting fixture manufacturing has shown pronounced moves during periods of construction activity, with elevated prices noted in late 2024 to 2025, as commercial projects progressed post-pandemic.
• Post-pandemic stabilization and volatility pockets: After sharp early-pandemic shocks, some indices exhibit relative stabilization, though price levels continue to rise versus pre-2020 baselines due to persistent cost pressures in metals, electronics, and freight, punctuated by occasional spikes from supply chain bottlenecks.

Key drivers:

• Raw materials and components: Prices for LEDs, drivers, circuit boards, and metal components influence the PPI. As LED adoption expands in both residential and industrial applications, component costs and yields drive price movements for finished lighting equipment.
• Energy and utilities costs: Electricity input prices affect manufacturing costs, particularly for large-volume producers. Fluctuations in energy costs often correlate with shifts in the PPI for electrical equipment manufacturing.
• Freight and logistics: Global shipping rates and container availability impact landed costs for imported components and finished products, feeding into PPI releases across monthly periods.
• Capacity and demand cycles: Construction activity, retrofitting of buildings, and the adoption of smart lighting solutions influence demand for fixtures and controls, which in turn pressure production pricing and supplier negotiation dynamics.
• Regulation and standards: Efficiency standards and labeling requirements (e.g., energy efficiency policies and rebates) affect product mix and pricing power for manufacturers, as higher-efficiency products may command premium pricing, altering the PPI composition over time.

Implications for stakeholders:

• For manufacturers, rising PPI levels signal higher input costs and potential pass-through opportunities, especially for segments tied to commercial real estate and institutional markets where project timelines can magnify pricing effects.
• For integrators and specifiers, understanding PPI movements helps in cost forecasting and contract risk management, particularly when long project cycles coincide with persistent price pressure in lighting components.
• For policymakers and economists, the PPI for electric lighting equipment serves as a proxy for broader electronics- and energy-related manufacturing dynamics, including supply chain resilience and energy-transition investments.

Recent data points and takeaways

• The latest data indicate ongoing monthly increases with some short-term volatility; the index for electric lighting equipment manufacturing reached multi-year highs in mid-2025, reflecting cumulative effects of the factors above, though individual sub-indices vary by product category.
• Conversely, subcategories like residential lighting fixture manufacturing show different pacing, influenced by housing market momentum and consumer demand shifts in energy-efficient products.

The Producers Price Index for Electric Lighting Equipment Manufacturing reflects a convergence of higher input costs, supply chain dynamics, and growing adoption of advanced lighting technologies. For professionals in lighting and building technology sectors, tracking these indices helps elucidate inflationary pressures, pricing strategy, and procurement planning across projects and product lines.

More information is available here.

Image above: Producer Price Index for the Electric Lighting Equipment Manufacturing industry. Source: FRED.

David Shiller

David Shiller is the Publisher of LightNOW, and President of Lighting Solution Development, a North American consulting firm providing business development services to advanced lighting manufacturers. The ALA awarded David the Pillar of the Industry Award. David has co-chaired ALA’s Engineering Committee since 2010. David established MaxLite’s OEM component sales into a multi-million dollar division. He invented GU24 lamps while leading ENERGY STAR lighting programs for the US EPA. David has been published in leading lighting publications, including LD+A, enLIGHTenment Magazine, LEDs Magazine, and more.

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