North American PCB book-to-bill ratio climbs

Total North American PCB shipments in October 2016 were 8.3% below the same month last year. Year-to-date as of October, shipment growth is up 2.8%. Compared to the preceding month, October shipments decreased 13.9%.

PCB bookings in October decreased 1.8% year-on-year, reducing year-to-date bookings growth to -0.1%. Compared to the previous month, orders in October 2016 were down by 12.3%.

“As a leading indicator, the book-to-bill ratio’s dip below parity (1.00) in June and July of this year anticipated last month’s downturn in sales,” said Sharon Starr, IPC’s Director of market research. “The flip side of this, however, is that the current strong book-to-bill ratio indicates the probability of a return to growth later this year or in early 2017,” she added.

Detailed data available
The next edition of IPC’s North American PCB Market Report, containing detailed October data from IPC’s PCB Statistical Program, will be available next week. The monthly report presents detailed findings on rigid PCB and flexible circuit sales and orders, including separate rigid and flex book-to-bill ratios, growth trends by company size tiers, military and medical market growth, demand for prototypes, and other timely data. This report is available free to current participants in IPC’s PCB Statistical Program and by subscription to others.

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 six months. A ratio of less than 1.00 indicates the reverse.

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.