IPC releases PCB industry results for May 2011

BANNOCKBURN, USA: 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 flat at zero percent growth and bookings decreased 13.4 percent in May 2011 from May 2010. Year to date, rigid PCB shipments were up 4.1 percent and bookings declined 9.2 percent. Compared to the previous month, rigid PCB shipments increased 0.3 percent and rigid bookings decreased 0.6 percent. The book-to-bill ratio for the North American rigid PCB industry in May 2011 reached 0.99.

Flexible circuit shipments in May 2011 were up 14.0 percent and bookings decreased 5.1 percent compared to May 2010. Year to date, flexible circuit shipments increased 14.2 percent and bookings were up 5.5 percent. Compared to the previous month, flexible circuit shipments decreased 6.9 percent and flex bookings jumped 22.0 percent. The North American flexible circuit book-to-bill ratio in May 2011 edged up to 0.97.

For rigid PCBs and flexible circuits combined, industry shipments in May 2011 increased 1.1 percent and orders booked decreased 12.6 percent from May 2010. Year to date, combined industry shipments were up 4.9 percent and bookings were down 8.0 percent. Compared to the previous month, combined industry shipments for May 2011 decreased 0.4 percent and bookings increased 1.3 percent. The combined (rigid and flex) industry book-to-bill ratio in May 2011 climbed to 0.99.

“We are starting to see some improvement in the North American PCB book-to-bill ratio,” said IPC president and CEO Denny McGuirk. “Although it is still just under parity and we are seeing flat growth in rigid PCB sales, the flexible circuit side of the business is showing strong sales growth.”

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.

Role of domestic production
IPC’s monthly survey of the North American PCB industry tracks bookings and shipments from US and Canadian facilities, which provide indicators of regional demand. These numbers do not measure US 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 2011, 80 percent of total PCB shipments reported were domestically produced. Domestic production accounted for 79 percent of rigid PCB and 88 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 vs. assembly
Flexible circuit sales typically include value-added services such as assembly, in addition to the bare flex circuits. In May, the flexible circuit manufacturers in IPC’s survey sample indicated that bare circuits accounted for about 50 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. 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.