North American Electronics Industry Growth is Slow but Remains Positive
North American electronics industry growth has slowed this year but most growth rates remain positive as of October 2019. Printed circuit board (PCB) sales growth strengthened to 3.5 percent compared to the same period last year. Electronics manufacturing services (EMS) growth slowed to 0.8 percent year over year as of October. The steep decline in semiconductor sales continues, but the negative growth rate appears to have bottomed out at -29 percent. These year-over-year growth rates reflect three-month rolling averages.
The leading indicators remain positive as of October 2019. The U.S. Manufacturing Purchasing Managers’ Index (PMI), which tends to lead industry sales by two to six months, has been declining all year but has stayed in positive territory (i.e., above 50) and it strengthen slightly in October. The 3/12 rate of change for U.S. new orders for electronic products, which leads industry sales by one to three months, remains nearly flat at 0.1 percent growth.
Another leading indicator is IPC’s PCB book-to-bill ratio. It is based on three-month rolling averages of orders and sales, and normally leads industry sales by three to nine months. The book-to-bill ratio has strengthened in recent months, reaching 1.11 in October driven by a rebound in orders. Ratios above parity (1.00) indicate greater demand than supply, which may be a precursor of sales growth for electronics manufacturers, while ratios below parity indicate the reverse.
These indicators suggest that sales growth is likely to continue but remain slow in the coming months for the North American EMS and PCB segments of the industry.
Notes:
- This information is provided by IPC International, Inc.
- Other industry data can be found at www.ipc.org.
- Three-month rolling averages smooth out some of the volatility in monthly data to show clearer trends.
- The U.S. Department of Commerce revised its historical data on U.S. new orders for computers and electronic products, as of May 16, 2019. This graph reflects the revised data.
- As of November 2019, PMI data is from the U.S. Manufacturing Purchasing Managers Index, a more relevant leading indicator for the electronics industry than the general Purchasing Managers Index, which was used previously.
Sources: IPC statistical programs for the EMS and PCB industries; SIA for semiconductor data; U.S. Census Bureau for U.S. new orders for computer and electronic products; and IHS Markit for the U.S. Manufacturing Purchasing Managers’ Index.
Market Research Reports
World Market Size Estimates
| Billions of U.S. Dollars | For Year | Source | |
| Printed Circuit Boards (PCBs) | $62.4 | 2018 | Prismark Partners |
| Electronics Manufacturing Services (EMS and ODM) | $542 | 2018 | New Venture Research |
| Electronic Equipment (Including Components) | $1,892 | 2018 | Reed Electronics Research |
Note: Changes in currency exchange rates affect these dollar amounts from year to year.
Lead-Free Trends
Source: IPC Global Solder Statistical Program and Global Solder Market Report
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