BANNOCKBURN, Ill. — IPC — Association Connecting Electronics Industries announced today the December findings from its monthly North American Printed Circuit Board (PCB) Statistical Program.
Rigid PCB shipments were down 3.6 percent and bookings were up 0.1 percent in December 2011 from December 2010. Year to date, rigid PCB shipments decreased 1.9 percent and bookings declined 8.8 percent. Compared to the previous month, rigid PCB shipments increased 7.2 percent and rigid bookings increased 10.7 percent. The book-to-bill ratio for the North American rigid PCB industry in December 2011 reached parity at 1.00.
Flexible circuit shipments in December 2011 were down 19.8 percent and bookings decreased 27.7 percent compared to December 2010. Year to date, flexible circuit shipments decreased 2.5 percent and bookings decreased 0.4 percent. Compared to the previous month, flexible circuit shipments increased 2.9 percent and flex bookings were down 10.7 percent. The North American flexible circuit book-to-bill ratio in December 2011 grew to 1.03.
For rigid PCBs and flexible circuits combined, industry shipments in December 2011 decreased 5.1 percent from December 2010, as orders booked decreased 2.8 percent from December 2010. Year to date, combined industry shipments were down 1.9 percent and bookings were down 8.1 percent. Compared to the previous month, combined industry shipments for December 2011 increased 6.9 percent and bookings increased 8.7 percent. The combined (rigid and flex) industry book-to-bill ratio in December 2011 increased to 1.00.
“North American PCB sales in December increased over the prior month and the book-to-bill ratio strengthened, reaching parity for the first time since last summer,” said Sharon Starr, IPC market research director. “North American PCB sales ended the year down 1.9 percent over 2010, but current indicators point to a resumption of modest growth in 2012,” she added.
The book-to-bill ratios are calculated by dividing the value of orders booked over the past three months by the value of sales billed during the same period from companies in IPC’s survey sample. A ratio of more than 1.00 suggests that current demand is ahead of supply, which is a positive indicator for sales growth over the next two to three months.
The Role of Domestic Production
Bare Circuits versus Assembly
IPC’s monthly survey of the North American PCB industry tracks bookings and shipments from U.S. and Canadian facilities, which provide indicators of regional demand. These numbers do not measure U.S. and Canadian PCB production. To track regional production trends, IPC asks survey participants for the percent of their reported shipments that were produced domestically (i.e., in the USA or Canada). In December 2011, 81 percent of total PCB shipments reported were domestically produced. Domestic production accounted for 82 percent of rigid PCB and 81 percent of flexible circuit shipments in December by IPC’s survey participants. These numbers are significantly affected by the mix of companies in IPC’s survey sample, which change slightly in January, but are kept constant through the remainder of the year.
Flexible circuit sales typically include value-added services such as assembly, in addition to the bare flexible circuits. In December, the flexible circuit manufacturers in IPC’s survey sample indicated that bare circuits accounted for about 48 percent of their shipment value reported for the month. Assembly and other services make up a large and growing segment of flexible circuit producers’ businesses. This figure is also sensitive to changes in the survey sample, which may occur at the beginning of each calendar year.
Interpreting the Data
Year-on-year and year-to-date growth rates provide the most meaningful view of industry growth. Month-to-month comparisons should be made with caution as they may reflect cyclical effects and short-term volatility. Because bookings tend to be more volatile than shipments, changes in the book-to-bill ratios from month to month may not be significant unless a trend of more than three consecutive months is apparent. It is also important to consider changes in bookings and shipments to understand what is driving changes in the book-to-bill ratio.