North American printed circuit board (PCB) and electronics manufacturing services (EMS) business growth continued in June 2016, according to the latest IPC Monthly Electronic Business report.
PCB and EMS industries in the region continued to report positive growth for the month, based on three-month rolling averages. Semiconductor shipments continued to show signs of recovery in June, although year-on-year sales growth remains negative, based on a three-month rolling average. The turnaround for semiconductor sales began in April 2016 after a steep decline that spanned 12 months.
Two leading indicators, the U.S. Purchasing Managers’ Index (PMI) and U.S. new orders for computer and electronic products, were mixed in June, according to IPC. The PMI strengthened and remained in positive territory, while U.S. new orders strengthened slightly but remained negative. The PMI typically leads sales by three to six months and U.S. new orders for electronic products tend to lead sales by one to two months.
Another leading indicator, IPC’s PCB book-to-bill ratio, is based on three-month rolling averages of orders and sales, and normally leads PCB sales by three to six months. The ratio was positive during the first five months of 2016, but slipped into negative territory to 0.98 in June due to declines in order in April and May. Ratios above parity (1.00) indicate greater demand than supply, which may be a precursor of strengthening sales for electronics manufacturers. These indicators point to a possible slowdown in electronics industry sales this summer, followed by slow growth in subsequent months.