The Q2 2025 Pulse of Lighting Market Feedback report—compiled by Channel Marketing Group and William Blair—reveals a temporary rebound in sales activity fueled by tariff-related urgency, while long-term demand and clarity remain elusive.
Sales Rise Across the Board
Average sales grew across the board: manufacturers and reps both reported 3.85% increases, and distributors saw a 1.66% uptick. While the gains mark a strong rebound from Q1’s declines, they were largely driven by a rush to release projects ahead of price hikes related to looming tariffs. Many industry insiders described the Q2 as a “mortgage on Q3,” warning of a slowdown ahead as backlogs deplete.
Tariffs Disrupt Pricing and Procurement
Across segments, tariffs were cited as the top disruptor—affecting everything from pricing strategy to project timelines. Frequent, unclear adjustments to tariff policies have created a “yo-yo” effect, paralyzing decision-making and dampening confidence. Manufacturers and reps noted that clients are increasingly seeking value engineering solutions and shifting sourcing away from China to futureproof procurement.
Demand Holds in Select Sectors Despite Caution
Despite the challenges, demand remains strong in sectors such as data centers, healthcare, education, and warehousing. Lighting controls and bundled solutions (e.g., EV chargers and ventilation) are emerging as growth opportunities. However, widespread economic caution persists. High interest rates, labor shortages, and utility incentive delays continue to stall project development, particularly in the Northeast and Midwest.
Outlook for Q3
Looking ahead to Q3, reps forecast a modest 3.09% growth, though 23% anticipate an organic decline. Concerns remain around the sustainability of recent momentum, especially as manufacturers navigate cost pressures, agency consolidation, and price volatility. Roughly 59% of manufacturers and 45% of reps expect additional price increases this quarter.
While Q2 offered short-term relief, the market remains unsettled. Until a clearer, more stable tariff policy emerges, most industry players agree that pricing, planning, and purchasing will remain unpredictable.
Read the Full Report
To read the full Q2 2025 Pulse of Lighting Report click here.