2025 Q3 Pulse of the Lighting Market … Steady

David Gordon Posted On September 29, 2025

Over the past couple of weeks, we’ve solicited the industry input into the pulse of the lighting industry in Q3. We had heard, nationally, and on average, that business was challenging, and, for the most part, that’s what the results came in as.

Q3 Pulse of Lighting

Highlights included:

Low / no single digit growth, inclusive of price increases that were announced due to tariffs.
- Essentially the price increases did not hold, or business was down significantly.
- The end result appears that unit volume declined to off-set any realized price increases.
There are companies that did have success, with some having double digit quarterly increases. Whether this is due to winning some projects, shipping projects, winning business using material warehoused prior to the announced tariffs, or because companies potentially having a pricing advantage due to Made in America or products conforming to USMCA, is unknown … and it could be any or all of these.
The essence is that the construction market isn’t growing to sustain new projects, and renovations are not occurring at a pace to absorb the new construction downturn.
As Goldman Sachs highlights in this chart below, data centers, which were previously part of the private commercial construction data, are excluded, are growing while commercial construction declines … and guess which has more lighting that gets installed.
Goldman Sachs – Office vs Data Centers 2021-2025
Q4 is projected similarly, albeit perhaps a little improvement, according to distributors, due to end of year projects, and probably, for some, capturing utility rebate-induced projects. Further, there may be a “tariff overhang” that impacts Q4. This could relate to market paralysis due to uncertainty, tariffs rising or falling (perhaps due to legal efforts, negotiations, or new tariffs on finished material or components.)
Distributors commented that Q3 was “bid, to rebid, to bid again,” all with customers hoping for declines. Distributors that excel at value-engineering, either internally or partnering with preferred reps / lighting agents, are able to win and take some share.
We heard things such as:
- “Demand is slowing”
- “DOGE impacted business between layoffs, GSA cutbacks” and then others commented about budget cuts affecting hospital and education construction.
- Tariffs, “uncertainty”, and interest rates
- Once projects are won, and submittals shared, releases are slow to come.
Almost half of specifiers are “concerned or see future activity slowing” 6 months from now according to manufacturers and reps / lighting agents. This is more an indication of “significant” projects.
All report mid-single digit price increases during the quarter and uncertainty remains for Q4 on what will happen with tariffs given that there is no finality regarding China and India and some manufacturers shared they have worked through their pre-tariff acquired inventory (finished goods and/or components) and may announce price increases.

Overall, while there is uncertainty in the market, it was a “steadying” quarter. Challenging.

To learn more and buy the report for only $35, click here.

What Will Drive the Lighting Market?

Of concern, however, is “what will drive the lighting market?”

It is doubtful that the new construction market will drive it, even if interest rates drop another ½ point and a total of 1 point between the recent one and Q1 2026. There does not appear to be much demand.

This then means:

As a distributor, it’s excelling at value-engineering and bringing ideas, brands, and products to those contractors that are design/build firms. Develop a list of local specifiers and develop a marketing campaign to promote “your” manufacturers, capture rep / lighting agent share of mind and insert yourself into every element of the sales process. Consider how to gain visibility to specifiers.
If you’re a rep / lighting agent, it’s all about demand generation. Same strategy as what distributors should be doing but focusing on your lines and trying to “control” the business / customer with “control” being defined as “generate brand preference.” If your manufacturer is truly interested in capturing market share, and hence growth, ask them to invest in your marketing strategy (and no, that doesn’t mean randomly funding an event.)

Further, if you really understand demand generation, consider how you can “create” renovation activity by targeting a, or selected, verticals in your geographic market (perhaps in partnership with a / selected contractors and/or selected, complementary, manufacturers.

If you are a manufacturer … do you want to win on price? Supporting selected distributors? Investing in your rep / agent’s marketing? Or …

Do the findings from the 2025 Q3 Pulse of Lighting report resemble what you are seeing in the market?

Geoffrey Marlow

September 29, 2025 at 8:10 am

This is a really well-written assessment of much of what’s happening out there.

What Strikes Me Most

“Bid, to rebid, to bid again” hits home for most. It’s not just a pricing dynamic—it’s a symptom of paralysis. When customers are cycling through that many iterations, they’re essentially telling you they don’t believe in the stability of anything: not prices, not timelines, not their own project funding. That’s a fundamentally different challenge than just “the market is slow.”

And the Goldman Sachs chart you included? Good framing. Everyone talks about the data center boom like it’s lifting all boats in commercial construction, but you’re absolutely right—a data center might need sophisticated power infrastructure, but it’s essentially a warehouse with servers. The lighting spend per square foot is a fraction of what goes into a corporate office build-out. We’re watching construction dollars shift into a category that barely moves the needle for the industry.

The Specifier Concern Data Is Telling

When half of specifiers are already concerned about activity six months out, that’s not just pessimism—that’s real pipeline visibility. These folks see what’s in development, what’s in design, and what’s getting shelved. If they’re worried now about spring 2026, that’s a leading indicator that deserves serious attention.

What’s interesting is the bifurcation you’re seeing: some companies with double-digit growth, while the average is flat to down. That suggests there’s actually opportunity in the chaos, but it’s going to the players who either (a) made smart pre-tariff inventory bets, (b) have genuine USMCA advantages, or (c) are executing dramatically better on the ground. The middle is getting hollowed out.

Where I Think You’re Spot On

Your strategic prescriptions around demand generation are right, but I’d push even further: the companies that will come out ahead aren’t just doing better marketing—they’re becoming partners in their customers’ business problems.

For distributors, “value engineering” is almost table stakes now. The real differentiator is whether you can walk into a contractor’s office and say, “Here’s how we help you win more bids profitably” versus “here’s our catalog.” Same with reps—”brand preference” only matters if you’re creating it by solving actual problems specifiers face, not just showing up with lunch and a product story.

The Uncomfortable Opportunity

Here’s something I haven’t seen discussed much: this environment might actually be perfect for creating demand rather than just capturing it. You mentioned targeting verticals for renovation activity in partnership with contractors and manufacturers. I think that’s undersold as a strategy.

Consider healthcare—not new hospital construction (which is getting crushed by budget cuts as you noted), but the thousands of medical office buildings and outpatient facilities that are sitting on 2012-era LED retrofits. The energy savings story has evolved, the controls technology has leapfrogged, and many of these facilities are now thinking about occupancy optimization post-pandemic. Someone needs to create that project pipeline because it’s not going to generate itself.

Or think about the utility rebate angle differently: most contractors wait for customers to come asking about rebates. What if you proactively identified every major commercial building in your territory that’s sitting on qualifying equipment, mapped it to utility program dollars, and essentially packaged up turnkey projects? You’d be creating demand, not just responding to it.

Have you or your network looked into how the IRA (Inflation Reduction Act) commercial building efficiency tax credits are being utilized in your territories? The 179D deduction was significantly enhanced and could be a demand driver that’s underutilized because it requires proactive customer education.

The Question Nobody’s Asking

What happens when the tariff situation actually resolves? Whether it’s in December or Q2 2026, there will be a moment when the uncertainty lifts. Every buyer who’s been sitting on the sidelines cycling through rebids is going to make a decision in roughly the same two-week window.

Are you positioned to capture that release, or will you still be operating in defensive mode? Because that moment—whenever it comes—is going to separate the companies that used this time to build relationships and pipeline from those who just tried to survive.

The analysis cuts through a lot of the noise that’s been circulating. Curious to see what the Q4 data reveals, especially with that tariff overhang you mentioned.