Q4 2025 Cost Index Report

Tariffs and sourcing changes continue to affect how electrical and mechanical equipment is priced and supplied. In Q4 2025, manufacturers reported adding price adjustments, tightening control over production capacity, and shifting more manufacturing closer to U.S. demand centers to reduce cost and delivery risk.

U.S. tariffs on certain electrical components imported from Asia, particularly China, continue to increase costs for select equipment, even as broader Producer Price Index (PPI) trends begin to level out. During Q4 2025, several manufacturers adjusted pricing or applied temporary surcharges to account for higher costs associated with copper components, enclosures, breakers, control devices, and shipping. On the mechanical side, HVAC manufacturers are shifting more assembly and fabrication closer to U.S. demand centers. While this improves long-term supply reliability, it has created near-term challenges, including component substitutions, additional engineering review, and changes to delivery schedules.

Lead times improved across several equipment categories, most notably cooling towers, air-cooled chillers, and custom and commercial air-handling units. These improvements are primarily driven by increased factory capacity, better component availability, and more consistent supplier allocation practices. Despite these gains, lead times remain highly dependent on equipment size, configuration, and project location. Long-cycle systems such as generators, switchgear, and uninterruptible power supply (UPS) equipment still require proactive planning and carry a higher risk of delay, particularly when integrated controls or custom packaging are involved.