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US Electronics Growth Slow, Steady

Both US economy and electronics industry statistics released this week point to a slight uptick in economic growth, which is a potentially positive indicator for the rest of the year.

For the second quarter of 2013, the United States economy was up 1.7 percent, according to the US Commerce Department. Although modest, this upturn is a good sign that is echoed by recent stats from the IPC.

IPC, an industry association for printed circuit board and electronics manufacturing, just released its monthly figures that track bookings and shipments from US and Canadian facilities. The results demonstrate that sales of both printed circuit boards and semiconductor sales were up during June 2013.

At the same time, some indicators showed a downward trend. There was a slight slowing in electronics manufacturing services (EMS) sales, and a dip in US orders for electronics products in June. “Except for U.S. new orders, the three-month moving averages were up for the rest of the supply chain,” the IPC said in a statement.

IPC's PCB book-to-bill ratio remained steady at 1.05 in June. In fact, monthly orders for PCBs have outpaced sales each month since the beginning of the year. This figure provides a strong future-looking indicator that shows demand outpacing supply. Overall, the uptick in book-to-bill points to continuation of this positive trend, especially after a two-year slump for the PCB market.

Spending on electronics manufacturing is up, which also bodes well for the industry. The North American Semiconductor Industry reported a book-to-bill of semiconductor equipment of 1.10 in June 2013, and it has also posted positive ratios for the past six months. “Bookings in the quarter ending in June are 20 percent above the quarter ending in March,” said Denny McGuirk, president and CEO of SEMI, in a press release. “As recently announced, we anticipate that total worldwide equipment spending will decline by low single-digits this year and rebound with a double-digit growth rate in 2014.”

Growth in the electronics industry will happen, but it may not occur as quickly as anyone had hoped. Sharon Starr, IPC director of market research, said in a statement:

A turnaround in sales growth this year still seems likely, but is not happening as quickly as the leading indicators suggested. We expect to see sales strengthening in the second half of this year, resulting in 2013 sales growth of less than 1 percent.

So, EBN community, are you optimistic about current and upcoming economic performance for the industry? Let us know in the comments.

(Sources: IPC statistical programs for the EMS and PCB industries; SIA for semiconductor data; US Census Bureau for US new orders for computer and electronic products)

(Sources: IPC statistical programs for the EMS and PCB industries; SIA for semiconductor data; US Census Bureau for US new orders for computer and electronic products)

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8 comments on “US Electronics Growth Slow, Steady

  1. apek
    August 8, 2013

    Hailey,

                   Unless Macro-economif reforms are made, I am not sure about sustainable growth in the industry. Please refer to Figure 1 in this article

    http://www.electronics.ca/presscenter/articles/2071/2/Globalization-of-Semiconductor-Manufacturing-Industry-From-Deception-to-Reformation-Towards-Recovering-US-Macro-Micro-Economic-Losses/Page2.html

    Most semiconductor businesses have become so much dependent of foundries in Asia that steadiness in growth is really doubtful. Even Intel has started to use external foundires like TSMC for manufacuturing advanced nanotechnology mode devices.

  2. _hm
    August 8, 2013

    This is an encouraging news. Holidays season is coming soon. It needs boost from major player to bring back work to USA and grow economy and electronics industry at higher pace. New iinovation from Google, Amazon, Samsung and Apple can help lot.

  3. Hailey Lynne McKeefry
    August 8, 2013

    @Apek, clearly China is a big part of the equation. From your standpoint, what would these macroeconomic reforms look like?

  4. apek
    August 8, 2013

    Eliminating Trade Deficit by having Fair trade policies which include imposing import duty on goods imported from China to make domestic manufacuted goods competitive w.r.t. cheaper chinese coutnerparts

     

    Eliminating Budget deficit by having progressive tax structure on 1950s which would lreduce tax burden on middle class and icrease consumer spending power as 70% US economy depends on consumer spending.

     

    These two reforms are extremely urgent. The rest can follow. However, The pciture might sound rosy about manufacturing coming back home. USD has its own troubles…the market value of USD needs to be restored to keep its position as Global trade currency. Here is an article which I recently authored regarding the same…I hope the readers would find it useful. Please post your comments http://www.proutglobe.org/2013/08/should-usd-be-restored-back-to-gold-standard/

  5. elctrnx_lyf
    August 9, 2013

    The reforms are necessary for the long term growth but this would definitely does not make the corporates and wall street happy. There is huge burden on the governments to change the mindset of these giants who actually control the market.

  6. apek
    August 9, 2013

    Do you really think that government can change the corporations and Wall St. mindset If that was true then Lobbying of Government politicians by corporations would not have been such a big problem in America. I believe that Political democracy needs significant reforms to make it work for common man. This is not just true in America but also in world's most populous democracy in India. If reforms are made towards economic decentralization…US would see a exponential growth in its year over year GDP…and by empowering masses and reducing ize of government, it would take away the control of economy from corporations and government and hand it to masses. In modern day Capitalism, Democracy has become a tool to exploit the people. Although it is best of the cracies that has been invented by mankind…I belive significant reforms are needed in current form of democracy. Government is not solution to the problem but Government is the problem. Ethical leadership is now only something we read in books.

  7. ahdand
    August 12, 2013

    @Hailey: Yes China holds the majority of the market share in manufacturing electronics but at least a slow growth is something which the US markets should be happy of since the growth was clearly zero sometime back. They were totally depending on China and Japan but now things have started to change a bit.

  8. Adeniji Kayode
    August 15, 2013

    @nimantha,

    Do you think US will be able to sustain this growth or this is just a mere change from zero level?

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