Sentiment among electronics manufacturers fell in June 2024, IPC has reported in its latest Sentiment of the Global Electronics Manufacturing Supply Chain Report. Despite the decline, sentiment remains above its long-term average.
The report found industry demand fell to its lowest level this year, while Cost pressures rose for a second consecutive month, after a record low in April.
68% of manufacturers expressed “somewhat” or “extreme” concern about Chinese manufacturers oversupplying inputs and components including PCBs at artificially low prices over the next year to stimulate the Chinese economy. 29% indicated a level of concern regarding manufacturers operating in Asia Pacific.
Outlook for next six months
Electronics manufacturers expect both labour and material costs to come down slightly, while material costs are expected to remain relatively stable. Although backlogs and ease of recruitment are likely to remain challenging, manufacturers expect profit margins and capacity utilization to rise.
Additional data showed
Industry demand fell to its lowest level this year.
- Demand fundamentals weakened for the third consecutive month, falling to the lowest level in 2024.
- The Demand Index slipped 3.1percent this month, after falling three percent last month.
- All four components of demand slipped this month. The Shipments Index fell one point, while both the New Orders Index and the Backlog Index dropped two points. The biggest drop came from the Capacity Utilization Index which fell eight points and dropped into contractionary territory.
Cost pressures rose for a second consecutive month, but after a record low in April.
- The Labor Costs Index dropped two points this month, but the Material Costs Index increased six points.
- The Material Costs Index is at its highest level since August 2023.
Industry outlook declined in June, dropping to the lowest level since October 2024.
- The industry outlook remains strongly positive, though it has slightly softened over the two months from a record high in March.
