May North American PCB post solid sales and orders growth; book-to-bill dips below parity

Electronics industry association IPC on June 27 announced the May 2019 findings from its North American Printed Circuit Board Statistical Program, showing that sales and order growth remained positive in May, while the book-to-bill ratio continued to slide to its lowest mark in more than two years.

IPC's data showed that total May North American PCB shipments were up 5.6% year-over-year, and year-to-date sales growth as of May was 12.3%. Compared to April, May shipments ticked up 2.5%.

May's PCB bookings increased 5.6% year-over-year, moving year-to-date order growth to 4.3%. Compared to April, May bookings were up 0.5%.

As for the book-to-bill ratio, it dipped further from April's parity mark of 1.00 to 0.99.

“Although sales and order growth continued in May for the North American PCB industry, slowing order growth rates pushed the book-to-bill ratio below parity,” said Sharon Starr, IPC’s director of market research.” This was the first time since January 2017 that the industry registered a book-to-bill ratio below parity (1.00). “Recent ratios hovering around parity indicate continued but slower growth in the coming months.” she added.

Interpreting the Data

IPC's 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 three to 12 months. A ratio of less than 1.00 indicates the reverse.

IPC advises that 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 reflect seasonal effects and short-term volatility. Because bookings tend to be more volatile than shipments, changes in the book-to-bill ratios from month to month might not be significant unless a trend of more than three consecutive months is apparent. It is also important to consider changes in both bookings and shipments to understand what is driving changes in the book-to-bill ratio.

IPC’s monthly PCB industry statistics are based on data provided by a representative sample of both rigid PCB and flexible circuit manufacturers selling in the USA and Canada. IPC publishes the PCB book-to-bill ratio at the end of each month. Statistics for the current month are normally available in the last week of the following month.