Industry continues to face high costs
According to IPC’s November Sentiment of the Global Electronics Manufacturing Supply Chain report, 80% of electronics manufacturers are experiencing rising material costs, while 77% indicate that labor costs are on the rise. At the same time, ease of recruitment, profit margins, and inventory from suppliers are presently declining.
“Over the next six months, manufacturers expect to see increases in both labor and material costs, although somewhat to a lesser extent,” said Shawn DuBravac, IPC chief economist, in a press release. “While supplier inventory is expected to improve, ease of recruiting and finding skilled talent and profit margins are likely to remain challenging.”
The manufacturing sector is however still doing well despite cloudy global manufacturing sentiment, according to IPC’s November Economic Outlook report. Demand and output have been restored to equilibrium as a result of the slowdown, allowing many manufacturers to concentrate on backlogs.
“Though we have seen some growth, we continue to remain somewhat cautious about the economic outlook,” added DuBravac. “Consumers continue to shift away from purchasing durable goods and return to services, and this trend is likely to continue.”
Additional information from the November economic outlook report demonstrates that there is still a great deal of economic uncertainty, which will continue to have a negative impact on consumer and company economic activity. The ongoing slowdown will continue in the coming quarters. “We are looking closely at any change in the rate of that slowdown,” DuBravac added.