May 2018

North American Electronics Business Indicators Still Going Strong

North American printed circuit board (PCB) sales growth continued to climb in March 2018 and electronics manufacturing services (EMS) sales rebounded after three months of positive but slowing growth. Semiconductor sales growth remains strong but has started to come down from its fourth-quarter 2017 peak. Growth in all three industries remained in positive territory. These growth rates are based on three-month rolling averages.

The U.S. Purchasing Managers’ Index (PMI), which tends to lead industry sales by two to six months, remained strong in March 2018. It has been trending upward over the past year and a half and has been in positive territory (above 50) for more than two years. The 3/12 rate of change for U.S. New orders for electronic products, which leads industry sales by one to three months, increased and remains strong.

Another leading indicator, IPC’s PCB book-to-bill ratio, is based on three-month rolling averages of orders and sales, and normally leads industry sales by three to nine months. The ratio has been in positive territory for the past 14 consecutive months, driven mainly by growth in orders. The book-to-bill ratio came down to 1.13 in March from a 12-year high earlier in 2018, but remains very strong. Ratios above parity (1.00) indicate greater demand than supply, which may be a precursor of sales growth for electronics manufacturers, especially when a run of positive ratios over several months is seen. These indicators suggest the likelihood of continued sales growth in the industry in 2018.


View Graph as a PDF

Notes:

  1. Three-month rolling averages iron out some of the volatility in monthly data to show clearer trends.
  2. This information is provided by IPC — Association Connecting Electronics Industries®. 
  3. Other industry data can be found at www.ipc.org.
  4. The U.S. Department of Commerce revised its historical data on U.S. new orders and issued new data on May 18, 2017. The graph above reflects the revised data, showing that U.S. new orders have been positive for the past twenty months.
  5. IPC’s EMS and PCB 3/12 rate-of-change data going back to March 2017 have been updated as of July 2017.

Sources: IPC statistical programs for the EMS and PCB industries; SIA for semiconductor data; U.S. Census Bureau for U.S. new orders for computer and electronic products; and Institute for Supply Management for the U.S. Purchasing Managers’ Index.

Market Research Reports

World Market Size Estimates

  Billions of U.S. Dollars For Year Source
Printed Circuit Boards (PCBs) $62.1* 2017 N.T. Information Ltd.
Electronics Manufacturing Services (EMS) $435.2** 2017 New Venture Research
Electronic Equipment (Including Components) $1,756 2017 Reed Electronics Research

*The PCB estimate for 2017 is a forecast and will be updated when the World PCB Production Report for the Year 2017 is published later this year.
**The EMS estimate for 2017 is a forecast and will be updated when the final 2017 estimate is confirmed later this year.

Note: Changes in currency exchange rates affect these dollar amounts from year to year.

Lead-Free Trends

Source: IPC Global Solder Statistical Program and Global Solder Market Report

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