North American Electronics Business Growth Slows but Leading Indicators are Mixed
Printed circuit board (PCB) growth slipped into negative territory in August 2016 while electronics manufacturing services (EMS) industries in North America continued to report positive growth, based on three-month rolling averages. Semiconductor shipments continued to show signs of recovery, although year-on-year sales growth remains negative, based on a three-month rolling average. The turnaround for semiconductor sales began in April 2016 after a steep decline that spanned 12 months.
Two leading indicators sent negative signals in August 2016. The U.S. Purchasing Managers’ Index (PMI) crossed into negative territory (below 50) after five consecutive months of positive PMIs. The 3/12 rate of change for U.S. new orders for electronic products has been in negative territory for the past seven months. These leading indicators for sales growth in the industry point to a slowdown in the next month or two.
Another leading indicator, IPC’s PCB book-to-bill ratio, is based on three-month rolling averages of orders and sales, and normally leads PCB sales by three to six months. The ratio rebounded in August 2016 to 1.02, driven by slower sales and growing orders. Ratios above parity (1.00) indicate greater demand than supply, which may be a precursor of positive sales growth for electronics manufacturers. This indicator suggests the likelihood of a slow autumn with a possible year-end recovery for the industry.
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Notes: As of the June 2016 release, 3/12 rates of change based on actual dollar amounts replaced the use of indices in the graph. Three-month rolling averages iron out some of the volatility in monthly data to show clearer trends. This information is provided by IPC — Association Connecting Electronics Industries®. Other industry data can be found at www.ipc.org.
Sources: IPC statistical programs for the EMS and PCB industries; SIA for semiconductor data; U.S. Census Bureau for U.S. new orders for computer and electronic products; and Institute for Supply Management for the U.S. Purchasing Managers’ Index.
Market Research Reports
World Market Size Estimates
||Billions of U.S. Dollars
|Printed Circuit Boards (PCBs)
||IPC, World PCB Production Report for the Year 2015
|Electronics Manufacturing Services (EMS)
||New Venture Research
|Electronic Equipment (Including Components)
||Reed Electronics Research
Note: Changes in currency exchange rates affect these dollar amounts from year to year.
Source: IPC Global Solder Statistical Program
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