Industry sentiment rises this spring

The month of April marked the third consecutive month of sentiment growth among electronics manufacturers, according to IPC’s April Sentiment of the Global Electronics Manufacturing Supply Chain.

When asked if they expected labor costs for hourly workers to rise over the next month, manufacturers in the United States, Mexico, and Europe predicted a 5% increase, while manufacturers in Asia predicted a slightly lower 4% increase.

Approximately 54 percent of electronics manufacturers are experiencing rising labour costs, and just over 43 percent are reporting rising material costs. At the same time, ease of recruitment and profit margins are presently declining.

Additional survey data show:

• The Demand Index slipped 0.23 percent in April, the New Orders Index recorded a two-point decline, and the Shipments Index and Capacity Utilization Index each fell one point.
• The Cost Index declined to its lowest level despite persistent inflationary pressures. The index remains in expansionary territory but continues to ebb lower.
• Both the Labor Costs Index and the Material Costs Index declined four points.

“The industry outlook remains strongly positive, though it has slightly softened over the last month due to a more moderate demand forecast,” said IPC chief economist and survey author Shawn DuBravac. “Over the next six months, electronics manufacturers expect labor and material costs to remain relatively stable. Notably, orders, shipments, and capacity utilization are all expected to rise considerably over the next six months.”

Read the full report here.