The BLS producer price index for switchgear and switchboard manufacturing stood at 394.8 in July 2026, 78% above January 2021. Wood Mackenzie’s survey puts medium-voltage switchgear at +50% since 2021 and circuit breakers at +47%, as reported by POWER Magazine. Either number is the largest increase for any category of electrical gear except transformers, and the buyer signing the PO gets one line for it: “base price.”
This piece takes the line apart. We weight every input in a switchgear factory with the Bureau of Economic Analysis cost structure for the industry, run each input’s own price series from January 2021 to July 2026, and see how much of the 78 points the inputs explain. Copper, steel, fabricated metal, bought-in components, services and labor together account for 36 of the 78 points. The other 43 points are margin. Eaton’s Electrical Americas segment went from a 20.6% operating margin in 2021 to 29.9% in 2025, and Powell Industries’ gross margin went from 15.9% to 29.0% over the same years, which is what 43 points of margin looks like in a 10-K.
What follows: the price series under the quote, the cost stack of a switchgear section, copper and its tariff, steel and the enclosure, labor, the decomposition, Eaton and Powell as the proof, published lead times by voltage class, and what to write into the next RFQ.
Source: Open Factory Lead-Time Monitor (compiled from BLS PPI PCU335313335313, WPU11752201A, WPU117522013, WPU117409 via FRED; as of July 2026)
Rebased to January 2021 = 100, the switchgear industry index reached 178 in July 2026, the narrower “switchgear except relays and ducts” commodity index reached 212, low-voltage panelboards reached 158, and power and distribution transformers reached 187.
The Price Series Under the Quote
There is no public transaction price for a 15 kV, 2,000 A metal-clad lineup. What exists is the BLS producer price index, a survey of what manufacturers say they received, published monthly about two weeks after month end. The Lead-Time Monitor carries four of these series for switchgear and one for transformers, and the Public Bid-Tab Price Book is our attempt to put $/section under the index from public awards. Until that book has enough MV switchgear rows, the index is the number.
The index says three things. First, the level: PCU335313335313 went from 221.5 in January 2021 to 394.8 in July 2026, +78.2%, and the commodity index for switchgear excluding relays and ducts, WPU11752201A, went from 123.6 to 262.6, +112.4%. Second, the shape: the industry index rose 10.1% in 2021, 19.6% in 2022, 6.6% in 2023 and 6.2% in 2024, then re-accelerated. Third, the recent path: year-over-year inflation was +4.6% in March 2025, +10.7% by July 2025, peaked at +15.4% in February 2026 and +15.2% in March 2026, and was still +8.5% in July 2026.
Source: Open Factory Lead-Time Monitor
Year over year, the industry index ran +4.6% in March 2025, +10.7% in July 2025, +15.4% in February 2026 and +8.5% in July 2026; the switchgear-only commodity index peaked at +22.3% in March 2026 and panelboards were +2.8% in July 2026.
The two biggest single-month jumps in the series since 2022 are April 2025 (+4.2%) and April 2026 (+3.2%), and both follow price-increase letters that OEMs issue at the start of the second quarter. Eaton told analysts on May 5, 2026 that it had “announced and implemented April 1 price increases in Electrical Americas,” per the Q1 2026 call transcript. The PPI recorded the industry’s version of that letter three weeks later.
Wood Mackenzie’s +50% for MV switchgear and +47% for breakers come from its September 2025 report with American Clean Power, which is gated; we cite it as reported by POWER Magazine and do not headline it as ours. Its 2021 base and survey method differ from the BLS, so 50% and 78% are two views of the same move, not a disagreement. For a buyer the useful conversion is this: a lineup quoted at $1.00 million in January 2021 would be quoted at roughly $1.5 to $1.8 million today on either basis, before the lead-time premium.
What a Switchgear Section Is Made Of
The decomposition needs weights, and the only public cost structure for the industry is the Bureau of Economic Analysis input-output table. The 2017 benchmark Use table breaks NAICS 335313, switchgear and switchboard apparatus manufacturing, into 405 input commodities plus labor, taxes and operating surplus, for an industry with $12.1 billion of output that year. It is dated, but the physics of a switchgear section have not changed since 2017: steel enclosure, copper bus, breakers and relays, and people.
Source: BEA Input-Output Accounts, 2017 Benchmark Use Table (Detail, before redefinitions), industry 335313; Open Factory grouping
Compensation of employees is $3.3 billion or 27.3% of output, purchased intermediate inputs $6.6 billion or 54.9%, gross operating surplus $2.0 billion or 16.7%, and taxes 1.1%. Inside the intermediates, copper and other nonferrous smelting and refining is $761 million (6.3%), iron and steel mills $646 million (5.3%), ornamental and architectural metal products, which is where enclosures sit, $530 million (4.4%), and forgings, stampings, screw products, machine shops, plate work and roll forming another $787 million (6.5%). Relays and industrial controls bought from NAICS 335314 are $429 million and switchgear bought from other switchgear makers $233 million, together 5.5%. Wholesale margins on all of that are $872 million, 7.2%.
Copper, the input every buyer asks about, is 6.3% of a switchgear factory’s output on the BEA basis, and all nonferrous metal together is 8.7%. Powell Industries lists its raw materials in the FY2025 10-K as “steel, copper and aluminum, as well as various engineered electrical components,” in that order. Grain-oriented electrical steel, the input that gates transformers and the subject of our Butler Works piece, enters switchgear only through instrument transformers and is not a line in this table.
Copper: Doubled, Then Tariffed
The IMF global copper price averaged $2.76 per pound in December 2019, $3.62 in January 2021 and $6.14 in July 2026, a 70% rise over the decomposition window. COMEX touched $6.77 per pound on August 7, 2026. The US producer price for copper wire and cable, WPU10260314, rose 68.9% over the same window and was up 17.9% year over year in July 2026. The Copper and Wire Price Sheet converts the weekly COMEX print into $/ft by conductor size and carries the escalation-clause calculator we return to at the end.
Source: IMF Primary Commodity Prices via FRED PCOPPUSDM via Open Factory Copper and Wire Price Sheet
Copper was $3.62/lb when the 2021 base was set, $4.37 in June 2021, $3.80 in December 2022, $4.04 in December 2024, and $6.14 in July 2026; it is up 69.9% since January 2021 and 38.6% in the twelve months to July 2026, so most of the rise landed after the tariff.
The tariff is the reason for the last leg. Proclamation 10962 of July 30, 2025 (90 FR 37727) imposed a 50% Section 232 duty on “semi-finished copper products and intensive copper derivative products” entered on or after 12:01 a.m. on August 1, 2025, applied “only to the copper content” of the article. Proclamation 11021 of April 2, 2026 (91 FR 18201) then moved the metals duties to “the full customs value of the imported product, regardless of metal content” from April 6, 2026, at 50% for articles that are essentially metal, 25% for metal-heavy derivatives, and a temporarily reduced 15% for the Annex III class of “metal-intensive industrial equipment and electrical grid equipment” through December 31, 2027. Proclamation 11032 of June 1, 2026 (91 FR 34085) restated that structure and amended the annexes from June 8, 2026. The Tariff Exposure Calculator carries each of these instruments with its HTS lines and a checked-on date; the general rule for an imported MV lineup as of August 2026 is the 15% Annex III rate, and for imported bus bar or breaker sub-assemblies it is 50% or 25%.
Refined copper itself is not yet tariffed. The Commerce Secretary’s June 2025 report recommended a phased universal tariff of 15% on refined copper from January 1, 2027 and 30% from January 1, 2028, which the proclamation left for a later decision; by August 2026 the COMEX premium over LME had become, in CNBC’s words, “a gauge of U.S. tariff expectations”, with the December 2026 spread near $1,000 a tonne. Our copper tariff take walks a 200-amp panel through the same arithmetic. For switchgear the arithmetic is short: an 8.7% copper weight times a 70% price rise is 6.0 index points, or one thirteenth of the 78-point increase.
Steel and the Enclosure
Steel is the other input every buyer names, and its path is the opposite shape from copper’s. The PPI for steel mill products, WPU1017, went from 208.0 in January 2021 to a peak of 449.7 in December 2021, fell to 266.5 by December 2024, and climbed back to 374.2 in July 2026, +79.9% over the full window and +22.5% year over year. Cold-rolled sheet and strip, the enclosure steel, WPU101707, followed the same arc to +78.6%. Fabricated metal products, WPU107, which is the closest proxy for purchased enclosures, stampings and machined parts, rose 66.6%.
Weighted, steel from mills at 5.3% of output contributes 4.3 points and fabricated metal at 10.9% contributes 7.2 points, so the whole steel chain is 11.5 of the 78 points. Steel round-tripped: a switchgear OEM that raised prices on the 2021 steel spike and did not cut them when steel fell 41% from December 2021 to December 2024 kept that money for three years before the 2026 tariffs made the price right again. Steel and aluminum carry the same 50% Section 232 rate as copper under Proclamation 11021, with the same 15% Annex III carve-out for grid equipment through 2027.
Grain-oriented electrical steel gets mentioned in every switchgear conversation and belongs in almost none of them. GOES prices doubled from 2020 to 2024 and Cleveland-Cliffs’ Butler Works is the only US mill, with a 920 mm coil-width ceiling against a market that wants 932 mm and up. That is a transformer story, and our transformer lead-time piece and the Transformer Sizing and Cost tool carry it. In a switchgear lineup, GOES appears in the current and potential transformers, a rounding error against the bus and the breakers.
Labor: The Biggest Line, the Smallest Mover
Labor is 27.3% of switchgear output on the BEA basis, more than copper, steel and enclosures combined, and it moved least. The employment cost index for manufacturing wages and salaries, ECIMANWAG, rose 23.4% from Q1 2021 to Q2 2026. Manufacturing average hourly earnings, CES3000000008, went from $23.23 to $30.33, +30.6%, and we use the higher figure in the sensitivity case. On the base case, labor contributes 6.4 points, the same as copper.
The cost that OEMs describe on calls is not the wage; it is the fixed cost of adding capacity ahead of volume. Eaton’s CEO told analysts in May 2026 that “every time you add fixed cost, labor, depreciation of new CapEx and start-up expenses ahead of volume, it creates this temporary margin headwind,” per the Q1 2026 transcript. Schneider’s $700 million US program puts MV in Mt. Juliet, switchgear in El Paso and breakers in Columbia, Missouri, on 2025 to 2027 timelines. Depreciation sits inside gross operating surplus in the BEA accounts, so some of what we book below as margin is new plant. Not most of it: Eaton’s Electrical Americas operating margin, which is after depreciation, still rose 930 basis points.
The Decomposition
The method is one line of arithmetic per input. Take the BEA 2017 weight for each input group, multiply by that group’s own price change from January 2021 to July 2026, and sum. Whatever the industry PPI rose that the inputs do not explain is booked to gross operating surplus. The assumptions are fixed 2017 weights (no substitution of aluminum for copper, though it happens), a named proxy series per group, taxes moving with output, and a wage index for labor. The full table with every series is in the paid section.
Source: Open Factory should-cost decomposition (BEA 2017 Use table weights; FRED PCOPPUSDM, WPU1017, WPU107, WPU1175, WPU1178, WPSFD4131, ECIMANWAG, PCU335313335313; as of July 2026)
From 100 in January 2021: copper and nonferrous metal add 6.0 points, steel 4.3, fabricated metal and enclosures 7.2, bought-in relays, controls and breakers 4.2, electronics 0.2, wholesale margins and other services 6.5, labor 6.4, taxes 0.8, for 35.6 points of input push; the residual to reach 178.2 is 42.6 points.
Input costs explain 36 of the 78 points on the base case and 40 on the high-cost case; margin expansion is 38 to 43 points either way, at least half of the price increase. The high-cost case swaps the wage index for average hourly earnings (+30.6%) and prices bought-in parts and services at the electrical machinery PPI (+36.6%) instead of the services PPI (+27.0%); it moves the residual from 42.6 to 38.4 points, per the sensitivity file. Read as shares of 2026 output, gross operating surplus goes from 16.7% of the 2017 dollar to roughly a third of the 2026 dollar. That is the number to hold in mind when a vendor’s letter cites “unprecedented input cost inflation.”
Two caveats belong here rather than in a footnote. The BEA weights are 2017 and the industry has shifted toward larger, more engineered lineups for datacenters, which carry more bought-in protection and controls; that raises the controls weight and lowers the residual by a point or two. And the PPI is a producer’s selling price, which includes the distributor-facing price but not the distributor’s margin, so the buyer’s invoice inflation may be higher still. Neither caveat gets the margin residual below a third of the increase.
Eaton’s Margin Is the Proof
Eaton reports Electrical Americas, its US, Canadian and Latin American electrical business, as one segment, with $13.3 billion of 2025 sales. Its segment operating margin was 20.6% in 2021, 22.5% in 2022, 26.5% in 2023, 30.2% in 2024 and 29.9% in 2025, on sales that rose from $7.2 billion to $13.3 billion. The FY2023 10-K attributes the 2023 step to “higher sales volumes and net price realization,” and the same filing says the 2022 gross margin gain came from “inflationary pricing recovery.” Those are the company’s words for the residual.
Source: Eaton Corporation plc, Form 8-K earnings releases Q4 2020 to Q2 2026 (SEC EDGAR); redrawn by Open Factory
Quarter by quarter the margin was 21.1% in Q4 2020, fell to 19.2% in Q4 2021 on what Eaton called “higher commodity and logistics costs,” crossed 23% by mid-2022, 26% by mid-2023, 29% by early 2024, peaked at 31.6% in Q4 2024, held 29.5 to 30.3% through 2025, dropped to 25.6% in Q1 2026 and recovered to 27.5% in Q2 2026.
The 2026 dip is the most instructive part of the series because management narrated it. In May, Eaton described a “negative price cost lag based on commodity inflation beginning of the year” that “will be more than offset in the full year by pricing that we already implemented on April 1,” and committed to “exit the year with margins north of 30%” and to a 32% margin by 2030, per the Q1 2026 call. In July, the CFO said the 190 basis point sequential improvement split “about 100 points from price cost and 90 points from output scale,” and that second-half margins would improve 450 to 500 basis points with 300 from price-cost after “pricing actions implemented in Q2 or early August,” per Yahoo Finance’s call summary. Eaton’s own bridge says price, not volume, carries 300 of the 450 to 500 basis points it expects to recover in the second half of 2026.
The demand side explains why it can. Electrical Americas backlog was $13.2 billion at December 31, 2025, up 31%, with book-to-bill at 1.2; by June 30, 2026 the twelve-month rolling average of orders was up 41% and backlog up 33%, per the Q2 2026 release. The Book-to-Bill League Table carries every listed electrical OEM on this basis, and the OEM Disclosure Scorecard notes what Eaton does not publish: lead times, list prices, or backlog in dollars by product line.
Powell: 16% to 31% Gross Margin, $415M to $2.4B
Powell Industries is the clean case because it makes almost nothing but switchgear, e-houses and the controls that go in them, and it reports backlog in dollars every quarter. Its backlog was $414.9 million at September 30, 2021, $592.2 million a year later, $1.3 billion from June 2023 through March 2025, $1.4 billion at June 2025, $1.6 billion at December 2025, $1.8 billion at March 2026 and $2.4 billion at June 30, 2026, of which $1.3 billion converts to revenue within twelve months.
Source: Open Factory Book-to-Bill League Table (compiled from Powell Industries 10-Q and 10-K filings; as of June 2026)
Backlog fell from $464.9 million in December 2020 to $414.9 million in September 2021, tripled to $1.3 billion by June 2023, sat there for seven quarters, and then rose $1.1 billion in the four quarters to June 2026, including a $619 million sequential jump in the last one.
The margin followed the backlog with a lag. Gross margin was 15.9% in fiscal 2021 (implied by the FY2022 10-K, which reports gross profit rising $10.0 million to $85.0 million on revenue up $62.0 million to $532.6 million), 16.0% in fiscal 2022, 21% in fiscal 2023, 27% in fiscal 2024, 29% in fiscal 2025, and 30.6% in the June 2026 quarter. Powell added 13 points of gross margin between fiscal 2021 and fiscal 2025, more than any other listed switchgear maker, on a book-to-bill that hit 3.0x in the June 2026 quarter. Management’s language on the August 2026 call was “a stable pricing environment,” “some opportunity for price in the market,” and “moderate inflation on core commodities, copper, aluminum, steel.” Moderate inflation and stable pricing at a 30.6% gross margin is the residual, said politely.
The order that moved the backlog was a datacenter: a “$400 million plus” award for phase one of a behind-the-meter “power island,” which Powell says increases its addressable content per site because the switchgear sits outside the building, where the architecture stays AC even as the white space moves to 800 VDC. Electric utility is 24% of the backlog and commercial and other industrial, which holds datacenters, is 40%. This is the mechanism our slot economy piece describes from the buyer’s side: a single hyperscale phase can absorb a mid-sized OEM’s annual output, and every other buyer prices against it.
Lead Times by Voltage Class
Price and delivery move together, and the delivery side has the same shape as the margin side: the datacenter buyer sets the marginal slot. The Lead-Time Monitor compiles published lead times, with the publisher and date on every cell, and refuses to average them. Here is the switchgear page as of August 2026.
Source: Open Factory Lead-Time Monitor (compiled from Siemens CompAS schedule via VAWN, Terrapin Construction Group, Electronate, Wood Mackenzie as reported; as of August 2026)
| Equipment class | Published lead time, weeks | Source | Date |
|---|---|---|---|
| LV panelboards | 21 to 32 | Siemens CompAS schedule via VAWN index | Aug 13 2026 |
| LV switchboards (MCCB incomers) | 32 to 41 | Siemens CompAS schedule via VAWN | Aug 13 2026 |
| LV switchgear (power circuit breaker) | 54 | Siemens CompAS schedule via VAWN | Aug 13 2026 |
| LV power circuit breaker switchboards (ACB incomers) | 84+ | Electronate estimator guide | Mar 20 2026 |
| MV switchgear, survey average | 44 | Wood Mackenzie T&D survey Q2 2025 | Oct 15 2025 |
| MV 5 kV / 15 kV metal-enclosed | 52 to 72 | Terrapin Construction Group slot reservations | Jun 2026 |
| MV 15 kV / 27 kV metal-clad | 60 to 80 | Terrapin Construction Group | Jun 2026 |
| MV 38 kV | 78 to 104 | Terrapin Construction Group | Jun 2026 |
| MV, datacenter specification, peak-demand OEMs | 104 to 156 | Electronate: approaching 2 to 3 years | Mar 20 2026 |
| MV switchgear, pre-pandemic reference | ~24 | Terrapin: schedules that assumed 24 weeks now need 72 | Jun 2026 |
Data: 06-lead-times-by-class.csv
The spread across rows is the point. Wood Mackenzie’s survey average of 44 weeks for MV switchgear in Q2 2025 is a utility-weighted number; a contractor’s June 2026 slot reservations show 52 to 72 weeks for 5 and 15 kV metal-enclosed, 60 to 80 for 15 and 27 kV metal-clad, and 78 to 104 for 38 kV, against about 24 weeks before 2020; an estimator’s guide puts datacenter-specification MV at two to three years at the busiest OEMs. On the LV side, Siemens’ published CompAS schedule, republished by VAWN on August 13, 2026, has LV switchgear at 54 weeks, switchboards at 32 to 41, panelboards at 21 to 32 and commodity breakers in stock. A 38 kV lineup ordered today ships in 78 to 104 weeks; a panelboard ships in 21 to 32, and the panelboard index rose 58% against 112% for switchgear.
Source: Census M3 series 35C via Open Factory Lead-Time Monitor
Census M3 unfilled orders for NAICS 3353 were $28.4 billion in July 2026 against $5.0 billion of monthly shipments, 5.7 months, versus 4.1 months in January 2021 and 2.6 months in January 2015; the peak was 6.7 months in July 2022, and shipments have grown 26% since then without denting the ratio.
Every row in that table is a published number from the party named; none of it is a panel or a survey of ours, and the Lead-Time-Adjusted Schedule uses exactly these cells to turn PO dates into an energization month. When the Quote Check tool tells you a 15 kV quote at 60 weeks is inside the published range, that is the range it means.
Why Prices Will Not Fall When Copper Does
The consensus in every trade-press piece is that switchgear prices track copper and steel and will ease when they do. The decomposition says the opposite. Copper contributed 6 of 78 points; if copper fell back to its January 2021 level tomorrow, the index would give back 6 points, from 178 to 172, and no OEM with a 5.7-month backlog and a 30% margin target would pass even that through unprompted. Eaton has told investors it will reach a 32% Electrical Americas margin by 2030, up from 29.9% in 2025, and the industry’s capacity additions (Schneider’s eight sites through 2027, Eaton’s more than $1 billion of North American electrical investment since 2023, Powell’s leased Houston expansion) are sized for the datacenter order book, not for price competition.
Three things could reverse it, and none is scheduled before 2027. First, the Annex III 15% rate for grid equipment expires December 31, 2027 under Proclamation 11021, after which imported lineups face 25% or 50% unless the annex is extended; that is a floor under domestic prices, not a ceiling. Second, the recommended 15% refined copper tariff starts January 1, 2027 if adopted, which raises the copper line again. Third, Vertiv stopped publishing its backlog in the second quarter of 2026, which we reconstructed in our Vertiv estimate; the day Eaton or Powell stops publishing theirs is the day the book-to-bill is turning, and it has not come.
Who wins: the four OEMs with US switchgear capacity and the distributors carrying their price letters; who pays: every buyer without a frame agreement, whose lineup is priced at the datacenter’s marginal slot whether or not a datacenter is anywhere near the project. The Datacenter MEP Cost Table carries switchgear at its current $/MW and lead time for the developers; the plant owner buying two sections for a 2 MW service upgrade pays the same index.
What to Do Monday
The decomposition converts into four clauses and one phone call. First, index the copper. Put a copper escalator in the PO that references COMEX on the quote date and adjusts both ways at shipment, using the conductor weights the OEM now has to know anyway: Proclamation 11021 requires importers to declare metal content by weight, and every OEM has the kilograms per section in its costing system. The Copper and Wire Price Sheet has the clause and the calculator; our switchgear quote anatomy shows where it sits among the eleven line items.
Second, ask for the steel and copper weight per section in the quote, and price the escalator only on those kilograms. On the BEA weights, metal is under 15% of the price; an escalator that floats the whole base price on a copper index hands the OEM the other 85% as a free option. Third, put a price-validity clause and a price-decrease trigger next to the escalator, because the April letters are annual and the steel round trip showed what happens without one. Fourth, run the quote through Quote Check against the Bid-Tab Price Book bands and the Monitor’s published lead time for the class before you sign; a 15 kV quote at 60 weeks is inside the range, and one at 40 weeks is a promise to verify with the factory, not the rep, as our RFQ guide sets out.
The phone call is to the panelboard and switchboard side of the same OEM. Where the one-line permits it, LV switchboards at 32 to 41 weeks and panelboards at 21 to 32 weeks, at an index that rose 58% rather than 112%, are the cheapest schedule and price relief available in 2026, and the Lead-Time-Adjusted Schedule will show what the substitution does to energization. Liquidated damages at the OEM’s margin, the subject of our LD piece, are the backstop for the MV sections you cannot avoid.
Behind the paywall: the decomposition line by line with every series and weight, the sensitivity that moves margin between 38 and 43 points of the 78, the OEMs ranked by how much price each has taken since 2021, and what each one’s own filings say to ask for at the negotiating table. The Lead-Time Monitor carries the switchgear series monthly.