Product Demand Weakens This Month, Though Operations Remain Generally Healthy

Though product demand weakened this month with Orders and Backlog Indexes slipping, overall electronics industry operations remain healthy per IPC’s September 2023 Global Sentiment of the Electronics Supply Chain Report.

“Both inventory indexes remain strong, suggesting inventory is available from suppliers and inventory is available to customers,” said Shawn DuBravac IPC chief economist. “We continue to hear of long lead times for some parts but overall inventories appear well balanced.”

Additional survey data show:

• Cost environment continues to improve: The Labor Costs Index and the Material Costs Index both fell this month. Both are near the lower part of their ranges and should continue to improve in the coming months.
•  Nearly two-thirds (63%) of electronics manufacturers are currently experiencing rising labor costs, with more half (52%) reporting rising material costs.
• The Shipments Index slipped four points this month but remains in expansionary territory. Manufacturers expect shipments to weaken further in the coming months.
• Per a special question asked about cutting hours in order to keep workers, roughly 22 percent of electronics manufacturers report they are cutting hours to keep workers even though they are facing slower demand.

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.