Electronics industry association IPC announced Aug. 28 the July 2019 findings from its North American Printed Circuit Board (PCB) Statistical Program, which showed that sales growth in July turned negative, following order growth into negative territory. Meanwhile, the book-to-bill ratio remained at parity (1.00).
IPC's data showed that total North American PCB shipments in July 2019 were down 5.3% year-over-year. Year-to-date sales growth as of July remained positive at 8.3%. Compared to June, July shipments decreased 23.1%.
PCB bookings in July decreased 4.3% year-over-year, bringing year-to-date order growth down to a positive 1.2%. Bookings in July were down 17.8% from the previous month.
“Year-on-year declines in orders in seven of the last 12 months are taking a toll on sales growth in the North American PCB industry,” said Sharon Starr, IPC’s director of market research. “Sales growth has slowed in recent months and dipped into negative territory in July. The slowdown is reflected in the book-to-bill ratio, which has hovered around 1.00 in the last five months. This indicates the probability of flattening sales growth in the second half of the year.”
Interpreting the Data
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 three to twelve months. A ratio of less than 1.00 indicates the reverse.
IPC states that year-on-year and year-to-date growth rates provide the most meaningful view of industry growth, as 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.
