Slower-than-Expected Growth Reduces PCB Book-to-Bill Ratio

IPC Releases PCB Industry Results for September 2013

IPC - Association Connecting Electronics Industries® announced today the September findings from its monthly North American Printed Circuit Board (PCB) Statistical Program. Sales and order growth remained slow in September and the book-to-bill ratio slipped below parity to 0.98.

Sluggish Growth Persists

Total North American PCB shipments decreased 0.7 percent in September 2013 from September 2012  Year-to-date shipment growth is still negative compared to the same period in 2012, but is improving and reached -3.5 percent in September.

North American PCB bookings increased 3.1 percent year over year, an improvement that brought year-to-date growth to -0.6 percent.  Year-to-date PCB bookings have been generally flat during the second and third quarters of 2013.

Month-to-month growth in PCB shipments and bookings was positive in September, reflecting normal seasonal patterns.  Compared to the previous month, PCB shipments in September were up 9.7 percent and bookings were up 6.5 percent.

North American PCB book-to-bill ratios had a strong run of positive results in the first seven months of 2013, driven by solid order growth.  Orders weakened during the summer months, which put downward pressure on the book-to-bill ratio.

“A combination of slower order growth and shipments that exceeded bookings in August and September brought the book-to-bill ratio below parity to 0.98,” said IPC’s director of market research Sharon Starr.  “Although year-on-year shipment growth in the North American PCB industry is still negative, it has been moving in the right direction.  The recovery we expected to see in late 2013 has been dampened by the industry’s expectation of slower economic growth in the fourth quarter due to the government shutdown.”

Detailed Data Available

The October edition of IPC’s North American PCB Market Report, containing detailed September data from IPC’s PCB Statistical Program, was published last week. The monthly report presents detailed findings on rigid PCB and flexible circuit sales and orders, including separate rigid and flex book-to-bill ratios, military and medical market growth, demand for prototypes, and other timely data. This report is available free to current participants in IPC’s PCB Statistical Program and by subscription to others. More information about this report can be found at www.ipc.org/market-research-subscriptions.

Interpreting the Data

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 three to six months.  A ratio of less than 1.00 indicates the reverse.

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 reflect seasonal 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.

IPC’s monthly PCB industry statistics are based on data provided by a representative sample of both rigid PCB and flexible circuit manufacturers selling in the USA and Canada. IPC publishes the PCB book-to-bill ratio at the end of each month. Statistics for the current month are not available until the last week of the following month.

IPC (www.IPC.org) is a global industry association based in Bannockburn, Ill., dedicated to the competitive excellence and financial success of its 3,300 member companies which represent all facets of the electronics industry, including design, printed board manufacturing, electronics assembly and test. As a member-driven organization and leading source for industry standards, training, market research and public policy advocacy, IPC supports programs to meet the needs of an estimated $2 trillion global electronics industry. IPC maintains additional offices in Taos, N.M.; Washington, D.C.; Stockholm, Sweden; Moscow, Russia; Bangalore, India; Bangkok, Thailand; and Shanghai, Shenzhen, Chengdu, Suzhou and Beijing, China.