North American Electronics Business Indicators Strengthening but Still Mixed
Based on three-month rolling averages, growth in printed circuit board (PCB), electronics manufacturing services (EMS) and semiconductor sales in North America improved in December. Solid sales growth was seen in the EMS and semiconductor industries. PCB sales growth remains in negative territory, but moved in the right direction.
The U.S. Purchasing Managers’ Index (PMI), which tends to lead industry sales by two to six months, continued to rise for the fourth consecutive month and remains solidly in positive territory (above 50). The 3/12 rate of change for U.S. new orders for electronic products improved, but remains in negative territory, which is largely a reflection of last year’s growth.
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. After three months of positive and strengthening book-to-bill ratios, it fell below parity (1.00) in November 2016 and slipped again in December to 0.98, due to weak orders in recent months. Ratios below parity (1.00) indicate greater supply than demand, which may be a precursor of slowing or negative sales growth for electronics manufacturers. These indicators suggest the likelihood of sluggish growth in early 2017 with some volatility.
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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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