North American PCB Business Down While Book-to-Bill Ratio Strengthens, Says IPC

BANNOCKBURN, Ill. IPC — Association Connecting Electronics Industries® announced today the January 2019 findings from its North American Printed Circuit Board (PCB) Statistical Program. Sales and orders both dropped sharply in January, but the book-to-bill ratio strengthened to 1.06.

Total North American PCB shipments in January 2019 were down 21.4 percent compared to the same month last year. Compared to the preceding month, January shipments decreased 12.3 percent.

PCB bookings in January fell 24.4 percent year-over-year. Bookings in January were down 10.7 percent from the previous month.

“While PCB sales and orders typically fall in January compared to the preceding month, the unusually sharp year-over-year decreases in January’s sales and orders probably reflect a market correction,” said Sharon Starr, IPC’s director of market research. “The growth cycle that began in mid-2017 peaked in late 2017 and early 2018. Growth has been slowing since the middle of 2018. Current year-over-year growth rates reflect a comparison with peak levels of sales and orders a year ago. The steady decline in the book-to-bill ratio from a 12-year high in January and February of 2018 down to 1.01 in November indicated slowing growth, but the ratio rebounded and remains positive because orders continue to outpace sales. This indicates that positive sales growth is likely to resume by mid-2019.”

Detailed Data Available

The fourth-quarter 2018 edition of IPC’s North American PCB Market Report, containing detailed data from IPC’s PCB Statistical Program, was just published today. The first-quarter 2019 edition will be available by mid-May. The quarterly report presents 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. This report is available free to current participants in IPC’s PCB Statistical Program and by subscription to others. PCB companies that are IPC members doing business in North America are invited to contact marketresearch@ipc.org for information about participating. More information about this report can be found at www.ipc.org/market-research-reports.

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 at the end of each month. Statistics for the current month are normally available in the last week of the following month.

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