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January PCB Book-to-Bill Drops to 0.89
March 2, 2009 |Estimated reading time: 2 minutes
BANNOCKBURN, IL IPC Association Connecting Electronics Industries saw its January findings from the monthly North American Printed Circuit Board (PCB) Statistical Program drop for rigid and flex PCBs. Flex circuits and rigid PCBs combined hit a book-to-bill ratio of 0.89, with flex staying fairly strong but rigid PCBs dipping significantly year-over-year.
Rigid PCB shipments are down 18.9% and bookings are down 30.7% in January 2009 from January 2008. 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 90% 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 January 2009 slipped further to 0.88.
Flexible circuit shipments in January 2009 were up 16.6% and bookings were down 1.8% compared to January 2008. In January, the flexible circuit manufacturers in IPC's survey sample indicated that bare circuits accounted for about 71% of their shipment value reported for the month. The North American flexible circuit book-to-bill ratio declined to 0.98.
For rigid PCBs and flexible circuits combined, industry shipments in January 2009 decreased 17.0% from January 2008, and orders booked decreased 29.3% from January 2008. In January 2009, 90% of total PCB shipments reported were domestically produced. The combined (rigid and flex) industry book-to-bill ratio in January 2009 fell to 0.89.
"The industry has not hit the bottom yet, but we will continue to watch the leading indicators, such as our book-to-bill ratio, for signs of an upturn," said Denny McGuirk, IPC president, noting the strength of flex circuits sales but overall decline from 2008 to 2009. Every January, IPC opens its monthly statistical programs to new participants, resulting in a slight change in the survey sample. Therefore, January's month-to-month growth rates are not available. Reporting of month-to-month and year-to-date growth rates will resume next month.Domestic production accounted for 90% of rigid PCB and 91% of flexible circuit shipments in January by IPC's survey participants. These numbers are significantly affected by the mix of companies in IPC's survey sample, which changed slightly in January but will remain constant through the remainder of the 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 U.S. and Canada.
For more information, visit www.ipc.org.