Cost pressures continue to recede and demand remains positive, with Orders Index rising to 107, the highest level in three months, per IPC’s June 2023 Global Sentiment of the Electronics Supply Chain Report.

“Cost pressures are continuing to recede,” said Shawn DuBravac, IPC chief economist. “The majority of survey respondents are still reporting that labor costs and material costs are rising, but the number of companies experiencing rising costs declined again this month. Less than half of respondents believe material costs will rise in the coming months.”

Additional survey results indicate:

• The Backlog Index slipped further into contraction territory this month, hitting the lowest level on record.
• Over the next six months, electronics manufacturers expect to see continued increases in both labor and material costs, although to somewhat of a lesser extent with respect to materials.
• While two-thirds (68 percent) of firms operating globally report rising customer inventory, only 26 percent of firms in Asia Pacific and 28 percent of those in Europe are experiencing a current increase, with European firms instead more likely to indicate customer inventory is holding steady.
• Per special questions asked about worker recruitment and retention, most manufacturers indicate employee retention this year is comparable to 2022. Roughly 18 percent indicate retention is more difficult this year, 18 percent indicate is it easier than in 2022 and 55 percent report it is about the same.
• In an effort to hire new employees, two-thirds (66 percent) of electronics manufacturers have raised salaries/rates beyond what was anticipated, with more than half (54 percent) looking for potential employees in non-traditional places. About 39 percent report they have improved benefits packages to attract new workers.

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

View full report.

IPC announced today the May 2023 findings from its North American Printed Circuit Board (PCB) Statistical Program. The book-to-bill ratio stands at 0.89.

Total North American PCB shipments in May 2023 were up 6.7 percent compared to the same month last year. Compared to the preceding month, May shipments were down 1.9 percent.

PCB bookings in May were up 4.1 percent compared to the same month last year. May bookings were up 6.7 percent compared to the preceding month.

“The North American PCB market looks pretty balanced this month. Shipments remain strong and we saw the first year-over-year rise in bookings we've seen since November 2022,” 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 May 2023 findings from its North American Electronics Manufacturing Services (EMS) Statistical Program. The book-to-bill ratio stands at 1.24.

Total North American EMS shipments in May 2023 were up 7.1 percent compared to the same month last year. Compared to the preceding month, May shipments decreased 5.2 percent.

EMS bookings in May increased 0.8 percent year-over-year and increased 4.4 percent from the previous month.

“This month we saw a small reversal in the trend we have been seeing this year,” said Shawn DuBravac, IPC’s chief economist. “New orders rose on a year-over-year basis for the first time since October 2022. Shipments fell slightly compared to last month but continue to show a positive trend.”

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.