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IPC Releases New Book-to-Bill Ratios and IMS/PCB Business Report for June 2004
July 29, 2004 |Estimated reading time: 3 minutes
Northbrook, Ill. — IPC — Association Connecting Electronics Industries announced today the findings from its monthly Printed Circuit Board (PCB) Statistical Program.
Due to divergent growth trends in the rigid PCB and flexible circuit segments of the industry, IPC will report separate monthly statistics for the two segments, beginning with this report.
The North American PCB Industry Book-to-Bill Ratio for June 2004 declined slightly from May, but remained positive at 1.06. This ratio is based on monthly data collected from both rigid PCB and flexible circuit producers that participate in IPC's monthly PCB Statistical Program.
Both rigid and flex shipments are rebounding from the recession and are showing strong growth, but flex is growing at a faster rate than rigid. The difference between rigid and flex orders growth is even more dramatic, resulting in a significant divergence of the book-to-bill ratios for these two industry segments in recent months. The separate book-to-bill ratios in June 2004 were 0.95 for rigid PCBs and 1.57 for flexible circuits.
The ratio is calculated by dividing the value of orders booked over the past three months by the value of sales billed during the same period from the companies in IPC's survey sample. A ratio of more than 1.00 suggests that current demand is ahead of supply, which indicates probable near-term growth.
For rigid PCBs and flexible circuits combined, industry sales billed (shipments) in June 2004 increased 31.3 percent from June 2003, and orders booked increased 13 percent from June 2003. Compared to 2003, shipments of PCBs are up 35.4 percent year-to-date, while bookings of PCBs are up 43.1 percent year-to-date. Combined industry shipments for June 2004 are up 5 percent over the previous month, and bookings decreased 19 percent over the previous month.
Rigid PCB shipments are up 28.4 percent and bookings are up 16.3 percent in June 2004 from June 2003. Year-to-date, rigid PCB shipments have increased 26.7 percent and bookings have increased 23.6 percent compared to the same period in 2003. Rigid PCB shipments from the survey sample grew 6.4 percent from the previous month and rigid bookings grew 14.2 percent from the previous month.
Flexible circuit shipments are up 76.9 percent and bookings are down 14.9 percent in June 2004 from June 2003. Year-to-date, flexible circuit shipments have grown 79.1 percent and bookings have grown 147 percent compared to the same period in 2003. Compared to the previous month, flexible circuit shipments from the survey sample decreased 1.4 percent and flex bookings decreased 69.7 percent. May 2004 was an exceptionally strong month for flexible circuit bookings. Flexible circuit sales, which include some value-added services in addition to the bare flex circuits, represent about 17 percent of total PCB sales in IPC's survey sample, which IPC considers to be representative of the industry. It is difficult for most flexible circuit manufacturers to break out value-added services, such as assembly, from their circuit sales. Therefore, the amount of value-added services included in this industry segment's sales is not known.
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.
The information in IPC's monthly industry statistics is based on data provided by a representative sample of both rigid and flexible PCB manufacturers in the U.S. and Canada. IPC publishes the PCB Book-to-Bill Ratio and the Interconnect Manufacturing Services (IMS) Business Report each month. Statistics for the previous month are not available until the last week of the following month.
IPC is a trade association dedicated to the competitive excellence and financial success of its more than 2,200 member companies, which represent all facets of the electronic interconnection industry, including design, printed circuit board manufacturing and electronics assembly. For more information, visit www.ipc.org.