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May PCB Orders Outpace Shipments
June 25, 2009 |Estimated reading time: 3 minutes
BANNOCKBURN, IL IPC Association Connecting Electronics Industries released the May findings from its monthly North American Printed Circuit Board (PCB) Statistical Program, showing the book-to-bill ratio above parity for the first time in 12 months. The rigid PCB book-to-bill reached 1.03 and the combined flex and rigid circuits book-to-bill hit 1.02.
Rigid PCB shipments were down 34.2% and bookings were down 25.7% in May 2009 from May 2008. Year to date, rigid PCB shipments were down 29.0% and bookings were down 32.2%. Compared to the previous month, rigid PCB shipments grew 3.6% and rigid bookings decreased 1.1%. 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 May 2009 continued to climb and reached 1.03.
Flexible circuit shipments in May 2009 are down 3.0% and bookings are down 12.9% compared to May 2008. Year to date, flexible circuit shipments are up 2.5% and bookings are down 7.1%. Compared to the previous month, flexible circuit shipments declined 10.4% and flex bookings are down 11.8%. In May, the flexible circuit manufacturers in IPC's survey sample indicated that bare circuits accounted for approximately 81% of their shipment value reported for the month. The North American flexible circuit book-to-bill ratio in May 2009 inched up to 0.96.
For rigid PCBs and flexible circuits combined, industry shipments in May 2009 decreased 32.2% from May 2008 and orders booked decreased 24.8% from May 2008. Year to date, combined industry shipments are down 26.9% and bookings are down 30.7%. Compared to the previous month, combined industry shipments for May 2009 are up 2.1% and bookings are down 2.1%. The combined (rigid and flex) industry book-to-bill ratio in May 2009 climbed to 1.02.
"After 12 consecutive months in negative territory, the book-to-bill ratio has finally climbed above 1.0 and that is good news for the industry," said IPC president Denny McGuirk. "It is a good indicator of sales growth over the next few months. Sales growth is already starting to turn the corner," he added. "Even though year-over-year sales growth is still negative, growth rates in the rigid PCB segment improved slightly over the previous month."
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 May 2009, 88% of total PCB shipments reported were domestically produced. Domestic production accounted for 88% of rigid PCB and 83% of flexible circuit shipments in May 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 three 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. For more information, visit www.ipc.org.