IPC releases PCB Industry Results for November 2011

PCB Industry Growth Rates and Book-to-Bill Ratios Announced
Rigid PCB shipments were down 5.9 percent and bookings were down 7.2 percent in November 2011 from November 2010. Year to date, rigid PCB shipments decreased 1.7 percent and bookings declined 9.6 percent. Compared to the previous month, rigid PCB shipments increased 8.8 percent and rigid bookings increased 2.8 percent. The book-to-bill ratio for the North American rigid PCB industry in November 2011 declined to 0.97.

Flexible circuit shipments in November 2011 were down 10.0 percent and bookings gained 13.6 percent compared to November 2010. Year to date, flexible circuit shipments decreased 0.7 percent and bookings increased 2.7 percent. Compared to the previous month, flexible circuit shipments increased 6.2 percent and flex bookings were up 14.6 percent. The North American flexible circuit book-to-bill ratio in November 2011 climbed back up to parity at 1.00.

For rigid PCBs and flexible circuits combined, industry shipments in November 2011 decreased 6.2 percent from November 2010, as orders booked decreased 5.6 percent from November 2010. Year to date, combined industry shipments were down 1.6 percent and bookings were down 8.5 percent. Compared to the previous month, combined industry shipments for November 2011 increased 8.6 percent and bookings increased 3.8 percent. The combined (rigid and flex) industry book-to-bill ratio in November 2011 declined to 0.97.

“North American PCB sales in November increased over the prior month, which is consistent with seasonal patterns,” said Sharon Starr, IPC market research director. “Sales this year continue to lag behind sales in the same months of 2010. Orders are up in the flexible circuit segment but weak in the rigid segment,” she added.

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 November 2011, 86 percent of total PCB shipments reported were domestically produced. Domestic production accounted for 85 percent of rigid PCB and 88 percent of flexible circuit shipments in November 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 flexible circuits. In November, 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.