September 2018

North American Electronics Business Growth Continues

Growth in the North American electronics business remained solid in July 2018. The printed circuit board (PCB) rate of sales growth continued to strengthen. Electronics manufacturing services (EMS) sales growth appears to have plateaued at around 10 percent over the same period last year. Semiconductor sales growth remains the strongest of the segments tracked in this report, but the rate of growth continued to slow in July as it retreated from its late-2017 peak. These year-over-year growth rates reflect three-month rolling averages.

The leading indicators are also strong. The U.S. Purchasing Managers’ Index (PMI), which tends to lead industry sales by two to six months, decreased from the previous month, but remained strong in July. It has been in positive territory (above 50) for almost two years. The 3/12 rate of change for U.S. new orders for electronic products, which leads industry sales by one to three months, held steady and remains strong.

Another leading indicator is IPC’s PCB book-to-bill ratio. It is based on three-month rolling averages of orders and sales, and normally leads industry sales by three to nine months. The ratio has been in positive territory for the past 18 consecutive months, driven mainly by growth in orders. The book-to-bill ratio held steady at 1.05 in July and remains in positive territory. Ratios above parity (1.00) indicate greater demand than supply, which may be a precursor of sales growth for electronics manufacturers, especially when a run of positive ratios over several months is seen.

These indicators suggest the likelihood of continued sales growth in the industry in 2018.


View Graph as a PDF

Notes:

  1. This information is provided by IPC International, Inc. 
  2. Other industry data can be found at www.ipc.org.
  3. Three-month rolling averages smooth out some of the volatility in monthly data to show clearer trends.
  4. The U.S. Department of Commerce revised its historical data on U.S. new orders and issued new data on May 17, 2018. The graph above reflects the revised data.

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 For Year Source
Printed Circuit Boards (PCBs) $62.1* 2017 N.T. Information Ltd.
Electronics Manufacturing Services (EMS) $463.3 2017 New Venture Research
Electronic Equipment (Including Components) $1,756 2017 Reed Electronics Research

*The PCB estimate for 2017 is a forecast and will be updated when the World PCB Production Report for the Year 2017 is published later this year.

Note: Changes in currency exchange rates affect these dollar amounts from year to year.

Lead-Free Trends

Source: IPC Global Solder Statistical Program and Global Solder Market Report

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