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Sentiment among electronics manufacturers slipped in July, dropping to the lowest level in a year. Despite the decline, sentiment remains above its long-term average according to IPC’s July Sentiment of the Global Electronics Manufacturing Supply Chain Report.
Regarding outlook for the next six months, electronics manufacturers expect both labor and material costs to come down slightly. Although profit margins, backlogs and ease of recruitment are likely to remain challenging, manufacturers expect capacity utilization to rise significantly.
Additional survey data show:
- Industry demand fell slightly, dropping to a neutral level between expansion and decline.
- Demand fundamentals weakened for the fourth consecutive month, falling to the lowest level since October 2023.
- The Demand Index is down 1.5 percent from last month.
- Demand was dragged lower by weaker backlogs and weaker new orders. The New Orders Index dropped two points and the Backlog Index dropped four points. The Capacity Utilization Index and the Shipment Index remained consistent with June results.
- Cost pressures eased in July.
- The Labor Costs Index dropped two more points this month and the Material Costs Index fell five points.
- The Labor Costs Index set a record low in July. However, both indices remain in expansionary territory suggesting a majority of businesses continue to face cost pressures.
- Industry outlook fell slightly, dropping to the lowest level in a year.
- The industry outlook remains strongly positive, though it continues to soften.
These results are based upon the findings of IPC’s Current State of Electronics Manufacturing Survey, fielded between June 14 and June 30, 2024.
Read the full report.
