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Electronics Industry Sentiment Dips in December
January 3, 2025 | IPCEstimated reading time: 1 minute
The electronics industry faced a dip in sentiment this December, as the Demand Index declined 1.8 percent according to IPC’s December Sentiment of the Global Electronics Manufacturing Supply Chain Report. It remained below 100 for the fourth consecutive month, signaling continued contraction.
Cost pressures continue to challenge operations. The Labor Costs Index climbed two percentage points from its all-time low, while the Material Costs Index dropped four percentage points. The majority of firms continue to report ongoing increases in both labor and material costs, straining operations.
In response to special questions regarding the electronics industry’s concern with proposed tariffs, trade concerns loom large for 2025. A majority (68 percent) of electronics manufacturers and suppliers express at least a moderate concern about the impact of potential tariffs on the electronics industry. A significant portion (38 percent) plan to pass the full cost increase of any tariffs on to their customers. Another 19 percent intend to share the burden, passing along past of the expense while absorbing some internally. Only a small majority (4 percent) expect to absorb the entire cost without raising prices. “These strategies suggest that most firms view transferring at least a portion of tariff-related costs to end-users as unavoidable,” said Shawn DuBravac, Ph.D., IPC chief economist and report author.
Additional survey data show:
- North American electronics manufacturers, along with those operating globally, are experiencing rising backlogs more so than European manufacturers.
- Material costs are declining more among electronics manufacturers in Europe and APAC vs. firms in North America.
- Over the next six months, electronics manufacturers expect labor and material costs to remain high, with ease of recruitment likely to remain challenging.
These results are based upon the findings of IPC’s Current State of Electronics Manufacturing Survey, fielded between November 15 and November 30, 2024.
Read the full report.
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