IPC Releases PCB Industry Results for August 2011

Flexible circuit shipments in August 2011 were down 6.5 percent and bookings declined 21.4 percent compared to August 2010. Year to date, flexible circuit shipments increased 1.9 percent and bookings increased 3.6 percent. Compared to the previous month, flexible circuit shipments increased 14.0 percent and flex bookings were up 3.2 percent. The North American flexible circuit book-to-bill ratio in August 2011 remained high at 1.14.

For rigid PCBs and flexible circuits combined, industry shipments in August 2011 decreased 4.4 percent from August 2010, as orders booked decreased 8.0 percent from August 2010. Year to date, combined industry shipments were up 1.5 percent and bookings were down 8.5 percent. Compared to the previous month, combined industry shipments for August 2011 increased 13.7 percent and bookings increased 14.3 percent. The combined (rigid and flex) industry book-to-bill ratio in August 2011 remained above parity at 1.02.

“Although North American PCB sales in August continued below last year’s levels, growth picked up from July to August,” said IPC President & CEO Denny McGuirk. “The book-to-bill ratio has been trending upward for the past five months,” he added, “which suggests that sales should hold up through the rest of this year.”
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.

The Role of Domestic Production
IPC’s monthly survey of the North American PCB industry tracks bookings and shipments from U.S. and Canadian facilities, which provide indicators of regional demand. These numbers do not measure U.S. 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 August 2011, 78 percent of total PCB shipments reported were domestically produced. Domestic production accounted for 78 percent of rigid PCB and 85 percent of flexible circuit shipments in August 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 versus Assembly
Flexible circuit sales typically include value-added services such as assembly, in addition to the bare flex circuits. In August, the flexible circuit manufacturers in IPC’s survey sample indicated that bare circuits accounted for about 55 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 and short-term volatility. 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.

The information in IPC’s monthly PCB industry statistics is based on data provided by a representative sample of both rigid and flexible PCB manufacturers in the USA and Canada. IPC publishes the PCB Book-to-Bill Ratio and the PCB Statistical Program Report each month. Statistics for the previous month are not available until the last week of the following month.