North American PCB Book-to-Bill Ratio Climbs to 1.08 in October

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IPC — Association Connecting Electronics Industries has released the October 2016 findings from its monthly North American Printed Circuit Board (PCB) Statistical Program. The PCB book-to-bill ratio continued to strengthen, climbing to 1.08, while sales and orders were both down in October.

Total North American PCB shipments in October 2016 were 8.3% below the same month last year. Year-to-date as of October, shipment growth is up 2.8%. Compared to the preceding month, October shipments decreased 13.9%.

PCB bookings in October decreased 1.8% year-on-year, reducing year-to-date bookings growth to -0.1%. Compared to the previous month, orders in October 2016 were down by 12.3%.

“As a leading indicator, the book-to-bill ratio’s dip below parity (1.00) in June and July of this year anticipated last month’s downturn in sales,” said Sharon Starr, IPC’s director of market research. “The flip side of this, however, is that the current strong book-to-bill ratio indicates the probability of a return to growth later this year or in early 2017,” she added.

Detailed Data Available

The next edition of IPC’s North American PCB Market Report, containing detailed October 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 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 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.

About IPC

IPC is a global industry association based in Bannockburn, Ill., dedicated to the competitive excellence and financial success of its 3,800 member companies which represent all facets of the electronics industry, including design, printed board manufacturing, electronics assembly and test. As a member-driven organization and leading source for industry standards, training, market research and public policy advocacy, IPC supports programs to meet the needs of an estimated $2 trillion global electronics industry. IPC maintains additional offices in Taos, N.M.; Washington, D.C.; Atlanta, Ga.; Stockholm, Sweden; Brussels, Belgium; Moscow, Russia; Bangalore and New Delhi, India; Bangkok, Thailand; and Qingdao, Shanghai, Shenzhen, Chengdu, Suzhou and Beijing, China.