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Global Electronics Industry Remains Under Pressure from Rising Costs
August 4, 2025 | Global Electronics AssociationEstimated reading time: 1 minute
The global electronics manufacturing supply chain remains under pressure from rising costs, with 61% of firms reporting higher material costs and 54% noting increased labor expenses. according to the Global Electronics Association’s Sentiment of the Global Electronics Manufacturing Supply Chain Report. While the Material Cost Index dipped slightly from June and profit margins showed a modest gain (+6 points), only 15% of manufacturers reported actual profit improvement, highlighting the fragility of recovery.
Market Dissonance: Strong Demand Despite Volatility, Hiring Challenges
Operational metrics such as orders, shipments, backlogs, and capacity utilization continue to signal expansion, maintaining momentum from the rebound that began in late 2024.
Over the next six months, electronics manufacturers expect material and labor costs to remain high, while ease of recruitment is expected to remain challenging.
Shawn DuBravac, Ph.D., Global Electronics Association’s chief economist and report author noted, “While demand indicators like orders and shipments remain strong, cost pressures continue to weigh heavily on the global electronics manufacturing sector, Operational momentum remains intact, yet the cost structure is straining under pressure. Manufacturers are adapting, but margin recovery remains elusive.”
Deeper Dive: Workforce Engagement
Electronics manufacturers globally report that their growth is constrained by an inability to recruit, onboard, retain, and upskill workers. In response to special questions regarding active hiring and skilled talent acquisition, 60% of firms are actively hiring, with European companies more likely to be pursuing talent for critical roles. Across all regions, the ability to secure skilled workers is a key limiting factor; 63% of firms report that talent shortages are constraining business growth, reinforcing labor as a critical operational challenge.
These results are based upon the findings of the Global Electronics Association’s Current State of Electronics Manufacturing Survey, fielded between June 12 and June 30, 2025.
Read the full report.
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