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Electronics Industry Demand Rises in February
February 21, 2025 | IPCEstimated reading time: 1 minute
Orders, capacity utilization, and backlogs all increased in the past month, pushing electronics industry demand higher according to IPC’s February Sentiment of the Global Electronics Manufacturing Supply Chain Report. The Demand Index is at its highest level since May 2024. Profit margins remain under pressure, but the Profit Margin Index has risen for the second consecutive month.
Though labor and material costs continue to rise and labor challenges persist as labor markets remain tight, the outlook for shipments, orders, backlogs and capacity utilization is expected to improve, reflecting strong optimism.
In response to special questions regarding companies pulling forward shipments as a result of the potential risk of tariffs, about 65 percent of manufacturers report they are not pulling forward shipments due to tariff risks, though 18 percent are adjusting less than 10 percent of shipments. “The majority of electronics manufacturers are maintaining their current shipment schedules, opting not to expedite deliveries despite potential tariff implications,” said Shawn DuBravac, Ph.D., IPC chief economist and report author. When asked about shipping surcharges 72 percent of respondents stated they have not experienced shipping surcharges beyond expectations, and 70 percent do not anticipate new surcharges in the next 60 days.
Additional survey data show:
- Nearly three-fifths (56 percent) of electronics manufacturers are currently experiencing rising labor costs, with half (50 percent) reporting rising material costs.
- Labor and material costs remain elevated across all regions, with the highest diffusion index in North America.
- The ease of recruiting skilled labor remains a persistent challenge across all markets and has worsened in the past month.
These results are based upon the findings of IPC’s Current State of Electronics Manufacturing Survey, fielded between January 16 and January 31, 2025.
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