The economic picture looks worse than a month ago
IPC’s August Global Sentiment of the Electronics Supply Chain Report shows that current conditions for the electronics supply chain remain challenging, with 86% of electronics manufacturers experiencing rising material costs, while 76% indicate labor costs are increasing.
“Industrial production rose at a healthy 6.2% annualized rate in the second quarter, strongly suggesting that the economy is not in a recession. At least not yet,” Shawn DuBravac, IPC chief economist, says in a press release.
Other forces exerting pressure on the economy are the weakening of demands for new orders and increasing energy and food prices. At the same time, this is helping ease supply chain disruptions and inflationary pressures brought on by fiscal and monetary stimulus, strong demand for goods, and short supply.
“On net, the global economic picture looks worse than it did a month ago, despite some positive developments,” DuBravac continued. “We have subsequently lowered our projections for economic growth in the regions we cover.”
Additional survey results from the global sentiment report indicate that supply chain constraints continue to ease, with most companies seeing an expansion in available inventories for the first time in five months. The survey also showed that the labor picture is less bad, but companies expect to continue to have difficulty finding skilled labor. And as before demand remains strong, but profit margins still hurting from high costs.