IPC — Association Connecting Electronics Industries® announced the May findings from its monthly North American Printed Circuit Board (PCB) Statistical Program.
PCB Industry Growth Rates and Book-to-Bill Ratios Announced
Rigid PCB shipments were down 1.9 percent in May 2012 from May 2011, but bookings increased 12.0 percent year over year. Year to date, rigid PCB shipments decreased 5.0 percent and bookings increased 3.1 percent. Compared to the previous month, rigid PCB shipments were up 2.0 percent and rigid bookings gained 1.9 percent. The book-to-bill ratio for the North American rigid PCB industry in May 2012 remained above parity at 1.02.
Flexible circuit shipments in May 2012 were down 10.0 percent, and bookings were down 1.1 percent compared to May 2011. Year to date, flexible circuit shipments decreased 9.1 percent and bookings decreased 2.1 percent. Compared to the previous month, flexible circuit shipments decreased 2.6 percent, but flex bookings were up 19.8 percent. The North American flexible circuit book-to-bill ratio remained high at 1.17.
For rigid PCBs and flexible circuits combined, industry shipments in May 2012 decreased 2.6 percent from May 2011 and orders booked increased 10.6 percent from May 2011. Year to date, combined industry shipments were down 5.3 percent and bookings were up 2.6 percent. Compared to the previous month, combined industry shipments for May 2012 increased 1.7 percent and bookings increased 3.3 percent. The combined (rigid and flex) industry book-to-bill ratio in May 2012 decreased slightly but continued in positive territory at 1.03.
“North American PCB sales and orders in May continued slightly below last year’s levels and reflected normal seasonal patterns,” said Sharon Starr, IPC director of market research. “The May book-to-bill ratio remained positive for the sixth consecutive month and was especially strong for the flexible circuit segment of the industry. This reinforces our hope that sales will gain strength in the second half of this year.”
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.
Book-to-bill ratios and growth rates for rigid PCBs and flexible circuits combined are heavily affected by the rigid PCB segment. Rigid PCBs represent an estimated 89 percent of the current PCB industry in North America, according to IPC’s World PCB Production Report.
The Role of Domestic Production
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 May 2012, 83 percent of total PCB shipments reported by survey participants were domestically produced. Domestic production accounted for 84 percent of rigid PCB and 80 percent of flexible circuit shipments in May 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.
Bare Circuits versus Assembly
Flexible circuit sales typically include value-added services such as assembly, in addition to the bare flexible circuits. In May, the flexible circuit manufacturers in IPC’s survey sample indicated that bare circuits accounted for about 41 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.
The information in IPC’s monthly PCB industry statistics is based on data provided by a representative sample of both rigid and flexible PCB manufacturers in the USA and Canada. IPC publishes the PCB Book-to-Bill Ratio and the PCB Statistical Program Report each month. Statistics for the previous month are not available until the last week of the following month.