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Materials Costs Continue to Improve but Labor Costs Remain a Pain Point for Electronics Manufacturers
December 5, 2023 | IPCEstimated reading time: 1 minute
Electronics industry sentiment improved during November with demand sentiment also taking a solid step up over the last 30 days per IPC’s November 2023 Global Sentiment of the Electronics Supply Chain Report.
And though materials costs continue to improve, labor costs remain a pain point. Three-fifths (62 percent) of electronics manufacturers say they are currently experiencing rising labor costs.
“In this month’s survey, we asked a special question about PCB and EMS production growth,” noted Shawn DuBravac IPC chief economist. “Electronics manufacturers believe the U.S. should adopt strong goals for production growth.” For the PCB sector, roughly 85 percent of respondents reported the five-year goal should be above current levels and the average suggested goal was 9.3 percent of global production. For the EMS sector, roughly 70 percent of respondents indicated a five-year goal above current levels. On average, respondents indicated the EMS industry should target 12.9 percent of global production by 2028 and 17.4 percent of production by 2033.
Additional survey data show:
- The New Order Index rose five points to 105 after hitting the lowest level for this index.
- The Materials Cost Index fell to another new low, dropping four points to 118. The Labor Costs Index rose one point to 130 after declining for two consecutive months.
- Shipments, orders, capacity utilization, backlogs and profit margins are expected to rise over the next six months, while all other key business indicators are expected to remain relatively stable.
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.
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