Electronics industry shows solid performance despite expected costs rise in 2023

Among other data, survey results show:

• On average, electronics manufacturers expect labour costs to increase 9.2% over 2022 levels; materials costs to rise 9.9% during the year and most surprisingly, they expect freight costs to rise 7.2% in 2023.

“Though manufacturers anticipate freight costs to rise, depressed demand and improving supply chain dynamics are currently pulling freight costs down, a trend that should continue during the year,” said IPC Chief Economist Shawn DuBravac. “Downward cyclical pressures will curtail volume which should keep prices in check. For some companies, declining freight costs are likely to be their most significant cost savings in 2023.” 

• Regarding digital project initiation, roughly 14% reported ERP system implementation and enhancements were their number one project for 2023. Other top projects include equipment/tools/resources/technology investment and upgrades and pursuit of CMMC certification.
• Profit margins are expected to decline at a significantly higher rate in APAC vs. North America. 42% of manufacturers in APEC anticipate profit margins to decline, while on 15% of North American manufacturers are expecting the same.

For the report, IPC surveyed hundreds of companies from around the world, including a wide range of company sizes representing the full electronics manufacturing value chain. View full report.