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Subdued Electronics Industry Sentiment Continues in November
November 25, 2024 | IPCEstimated reading time: 1 minute
The electronics industry faced a mixed sentiment in November, with modest improvements in demand overshadowed by rising cost pressures according to IPC’s November Sentiment of the Global Electronics Manufacturing Supply Chain Report.
The Demand Index rose 2.6 percent in November but remains subdued for the third consecutive month. The Backlog Index, already in contraction, fell an additional two points to reach a new record low. Capacity Utilization returned to expansionary territory, while the New Orders Index improved slightly but stayed in contraction for the third straight month. The Shipment Index rose three points, signaling some positive movement.
In response to special questions regarding the electronics industry workforce’s basic understanding of AI skills, 69 percent of respondents agreed that a broad understanding of AI will be essential for the workforce, yet only 11 percent of employees have received AI training to date, indicating a significant gap between perceived importance and current investment in skills development.
According to Shawn DuBravac, Ph.D., IPC chief economist and report author, industry outlook remains positive this month despite cost concerns. “Industry outlook remains optimistic, with expectations for demand improving. However, concerns over rising costs weigh on confidence as firms brace for continued pressures,” stated Dr. DuBravac.
Additional survey data show:
- Cost pressures intensify -- The Labor Costs Index remained flat at its all-time low. However, the Material Costs Index climbed to its highest level since June 2024, highlighting renewed cost pressures. A majority of firms continue to report rising material and labor costs, adding strain to operations.
- Outlook for next six months -- Over the next six months, electronics manufacturers expect labor and material costs to remain high, with ease of recruitment likely to remain challenging.
- Regional differences in outlook -- Nearly three-fifths (57 percent) of electronics manufacturers in APAC, along with half (48 percent) of North American manufacturers, expect capacity utilization to increase over the next six months, which is significantly higher than the 8 percent increase expected among those operating globally.
These results are based upon the findings of IPC’s Current State of Electronics Manufacturing Survey, fielded between September 16 and September 30, 2024.
Read the full report.
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