New data from IPC show that most electronics manufacturing industry executives see a recession as inevitable.

IPC’s October Monthly Economic Outlook and Global Sentiment Survey found that 27 percent of industry executives believe the economy is already in a recession, 45 percent believe the economy will enter a recession in 2023, and 13 percent believe the economy will enter a recession in the fourth quarter of 2023. Industry executives expecting a recession are bracing for a longer one.

“Tight financial conditions and an uncertain economic outlook are making both businesses and consumers more cautious,” stated Shawn DuBravac, IPC chief economist. “We have reached the end of the post-lockdown rebound.”

Among other conclusions, the IPC survey results show:

• After declining for two consecutive months, the Materials Cost Index rose three points.
• Three-fourths (73 percent) of electronics manufacturers indicate labor costs are on the rise.
• Ease of recruitment, profit margins, and inventory available from suppliers are presently declining.
• Positively, manufacturers expect to see a decline in backlogs over the next six months.

Inflation continues to dominate the narrative, with the U.S. likely past peak inflation, while the situation worsens in Europe. Europe is expected soon to reach peak inflation, and prices continue to rise. Projections for economic growth in Europe in 2023 have been lowered, and now show a decline for the first time for the entire year.

China’s economy remains below the targeted 5.5 percent growth expected for the year, with growth likely to be closer to 3 percent in 2022. The yuan has fallen to its lowest level in 14 years.

IPC surveyed hundreds of companies from around the world, including a wide range of company sizes representing the full electronics manufacturing value chain.

View the full reports: 

Monthly Economic Outlook

Current Sentiment of the Global Electronics Manufacturing Supply Chain

IPC announced today the September 2022 findings from its North American Printed Circuit Board (PCB) Statistical Program. The book-to-bill ratio stands at 1.12.

Total North American PCB shipments in September 2022 were up 14.6 percent compared to the same month last year. Compared to the preceding month, September shipments rose 17.9 percent.

PCB year-to-date bookings in September were down 2.6 percent compared to last year. However, bookings in September increased 52.0 percent from the previous month.

“The North American PCB market experienced strong growth in booking and shipments in the last month -- with shipments recording the second highest levels in recent history -- a sign that supply chain dynamics continue to improve,” said Shawn DuBravac, IPC’s chief economist.

Detailed Data Available

Companies that participate in IPC’s North American PCB Statistical Program have access to detailed findings on rigid PCB and flexible circuit sales and orders, including separate rigid and flex book-to-bill ratios, growth trends by product types and company size tiers, demand for prototypes, sales growth to military and medical markets, and other timely data.

Interpreting the Data

The book-to-bill ratios are calculated by dividing the value of orders booked over the past three months by the value of sales billed during the same period from companies in IPC’s survey sample. A ratio of more than 1.00 suggests that current demand is ahead of supply, which is a positive indicator for sales growth over the next three to twelve months. A ratio of less than 1.00 indicates the reverse.

Year-on-year and year-to-date growth rates provide the most meaningful view of industry growth. Month-to-month comparisons should be made with caution as they reflect seasonal effects and short-term volatility. Because bookings tend to be more volatile than shipments, changes in the book-to-bill ratios from month to month might not be significant unless a trend of more than three consecutive months is apparent. It is also important to consider changes in both bookings and shipments to understand what is driving changes in the book-to-bill ratio.

IPC’s monthly PCB industry statistics are based on data provided by a representative sample of both rigid PCB and flexible circuit manufacturers selling in the USA and Canada. IPC publishes the PCB book-to-bill ratio by the end of each month.

IPC announced today the September 2022 findings from its North American Electronics Manufacturing Services (EMS) Statistical Program. The book-to-bill ratio stands at 1.29.

Total North American EMS shipments in September 2022 were up 15.5 percent compared to the same month last year. Compared to the preceding month, September shipments decreased 0.1 percent.

EMS bookings in September increased 21.1 percent year-over-year and increased 18.1 percent from the previous month.

“North American EMS bookings improved in the last month, hitting a high for the year, a sign that demand for durable goods still has some life despite the slowing macroeconomic environment,” said Shawn DuBravac, IPC’s chief economist. “Shipments remain healthy for a second consecutive month, a hopeful sign that severe supply chain constraints are behind us.”

Detailed Data Available

Companies that participate in IPC’s North American EMS Statistical Program have access to detailed findings on EMS sales growth by type of production and company size tier, order growth and backlogs by company size tier, vertical market growth, the EMS book-to-bill ratio, 3-month and 12-month sales outlooks, and other timely data.

Interpreting the Data

The book-to-bill ratios are calculated by dividing the value of orders booked over the past three months by the value of sales billed during the same period from companies in IPC’s survey sample. A ratio of more than 1.00 suggests that current demand is ahead of supply, which is a positive indicator for sales growth over the next three to twelve months. A ratio of less than 1.00 indicates the reverse.

Year-on-year and year-to-date growth rates provide the most meaningful view of industry growth. Month-to-month comparisons should be made with caution as they reflect seasonal effects and short-term volatility. Because bookings tend to be more volatile than shipments, changes in the book-to-bill ratios from month to month might not be significant unless a trend of more than three consecutive months is apparent. It is also important to consider changes in both bookings and shipments to understand what is driving changes in the book-to-bill ratio.

IPC’s monthly EMS industry statistics are based on data provided by a representative sample of assembly equipment manufacturers selling in the USA and Canada. IPC publishes the EMS book-to-bill ratio by the end of each month.