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Materials Costs Continue to Improve but Labor Costs Remain a Pain Point for Electronics ManufacturersDecember 5, 2023 | IPC
Estimated 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.
Sentiment among electronics manufacturers remains positive, despite minor setbacks during January, according to IPC’s February Sentiment of the Global Electronics Manufacturing Supply Chain Report.
Net sales increased 31% to SEK 1,968 (1,497) million. Based on constant exchange rates, the increase in net sales was 30%.
Electronics Industry sentiment improved during January, with electronics manufacturers, on average, stating that they expect 5.2 percent revenue growth for 2023, with an increase to 9.5 percent in 2024, according to IPC’s January 2024 Global Sentiment of the Electronics Supply Chain Report.
Electronics industry sentiment took a dip in December with New Order, Shipment, and Backlog Indices falling, with only Capacity Utilization Index holding steady.
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