Industry Demand Holding Up Despite Deteriorating Economic Outlook, High Costs Continue to Create Challenging Conditions for Electronics Manufacturers

Per IPC’s December Global Sentiment of the Electronics Supply Chain Report, over the next six months, manufacturers expect to see continued increase in both labor and material costs. Ease of recruitment and profit margins are likely to remain challenging.

Among other data, survey results show:

• Demand remains solid, but closes the year on a lighter note: The Orders Index began the year at 123, strongly in expansionary territory, but closes the year at 107. This is solidly in expansionary territory but down for a second consecutive month and the lowest reading this year.
•  Supply chain constraints have improved notably since the start of the year: The Inventories Available to Customers (IAC) Index has improved throughout the year. It began the year in contractionary territory but ends the year at 105 suggesting available inventories are growing.
• Costs remain elevated: The Materials Costs Index dropped one-point last month, to an all-time low, but the index remains high, suggesting cost pressures continue.

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.

For more information on IPC’s industry intelligence program including new reports, visit: www.ipc.org/advocacy/industry-intelligence.