N.A. PCB Book-to-Bill Ratio Falls but Sales Growth Resumes

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IPC — Association Connecting Electronics Industries® announced today the November 2016 findings from its monthly North American Printed Circuit Board (PCB) Statistical Program. The PCB book-to-bill ratio fell below parity, to 0.99, while sales resumed slow but positive growth in November. 

Total North American PCB shipments in November 2016 were up 0.6% compared to the same month last year. Year-to-date as of November, shipment growth is up 2.6%. Compared to the preceding month, November shipments increased 1.0%. 

PCB bookings in November decreased 5.4% year-on-year, reducing year-to-date bookings growth to -0.6%. Compared to the previous month, orders in November 2016 were down by 3.8%. 

"North American PCB orders have been more volatile than usual in the second half of 2016, causing volatility in the book-to-bill ratio," said Sharon Starr, IPC's director of market research. "Year-on-year growth in both orders and sales has been trending gradually downward since last spring's minor recovery but, based on the mostly positive book-to-bill ratios of the last few months, modest sales growth seems likely to resume in early 2017," she added.

Detailed Data Available 

The next edition of IPC's North American PCB Market Report,containing detailed November data from IPC's PCB Statistical Program, will be available next week. The monthly 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 company size tiers, military and medical market growth, demand for prototypes, and other timely data. This report is available free to current participants in IPC's PCB Statistical Program and by subscription to others. More information about this report can be found here.

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 six 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.