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September Book-to-Bill Above Parity: 1.08
October 30, 2009 |Estimated reading time: 3 minutes
BANNOCKBURN, IL — IPC — Association Connecting Electronics Industries announced the September findings from its monthly North American Printed Circuit Board (PCB) Statistical Program. “We’re finally starting to see the turnaround in the September numbers for the North American PCB industry,” said IPC president Denny McGuirk. “Both rigid PCB and flexible circuit sales and orders are up by double digits compared to August. Rigid PCB sales and orders are still below September of last year, but the rate of decline is shrinking. Flexible circuit business is ahead of September last year. The most promising indicator is the book-to-bill ratio at 1.08,” he added. “It has been above parity for five consecutive months.”
Rigid PCB shipments declined 15.9% and bookings were down 7.8% in September 2009 from September 2008. Year to date, rigid PCB shipments were down 27.3% and bookings fell by 24.7%. Compared to the previous month, rigid PCB shipments grew by 21.7% and rigid bookings increased 29.7%. Rigid PCBs represent an estimated 91% of the current PCB industry in North America, according to IPC’s World PCB Production and Laminate Market Report. The book-to-bill ratio for the North American rigid PCB industry in September 2009 remained at 1.09.
Flexible circuit shipments in September 2009 went up 7.9% and bookings increased 12.1% compared to September 2008. Year to date, flexible circuit shipments were down 1.5% and bookings were down 4.9%. Compared to the previous month, flexible circuit shipments went up 22.0% and flex bookings increased 48.1%. In September, the flexible circuit manufacturers in IPC’s survey sample indicated that bare circuits accounted for approximately 65% of their shipment value reported for the month. The North American flexible circuit book-to-bill ratio in September 2009 climbed to 0.95.
For rigid PCBs and flexible circuits combined, industry shipments in September 2009 decreased 14.3% from September 2008 and orders booked decreased 6.4% from September 2008. Year to date, combined industry shipments were down 25.5% and bookings were down 23.4%. Compared to the previous month, combined industry shipments for September 2009 increased 21.8% and bookings went up 31.0%. The combined (rigid and flex) industry book-to-bill ratio in September 2009 reached 1.08.
“We’re finally starting to see the turnaround in the September numbers for the North American PCB industry,” said IPC president Denny McGuirk. “Both rigid PCB and flexible circuit sales and orders are up by double digits compared to August. Rigid PCB sales and orders are still below September of last year, but the rate of decline is shrinking. Flexible circuit business is ahead of September last year. The most promising indicator is the book-to-bill ratio at 1.08,” he added. “It has been above parity for five consecutive months.”
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, however, IPC asks survey participants for the percent of their reported shipments that were produced domestically (i.e., in the USA or Canada). In September 2009, 84% of total PCB shipments reported were domestically produced. Domestic production accounted for 84% of rigid PCB and 86% of flexible circuit shipments in September by IPC survey participants. These numbers are significantly affected by the mix of companies in IPC’s survey sample, which may change slightly in January, but are kept constant through the calendar 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 six months.
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. 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 three consecutive months or more 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.
2009 IPC Book-to-Bill Reports:IPC August PCB Book-to-Bill Ratios Steady at ParityIPC's July Book-to-bill Stays Just Above Parity 2009 PCB Orders Down 30% Year-to-Date, June Book-to-Bill PositiveMay PCB Orders Outpace ShipmentsApril PCB Book-to-Bill Shows Glimpse of RecoveryQ'02 Facing Soft Market; March PCB Book-to-Bill ReleasedRigid PCB Book-to-Bill Remains Low in February, Flex Moves UpJanuary PCB Book-to-Bill Drops to 0.89