Cost pressures receding as industry expects some sector growth in 2023
The IPC says that last month's Global Sentiment of the Electronics Supply Chain Report delivered a mixed bag of industry sentiment. Cost pressures are receding, industry demand appears to be slowing, and the industry expects growth in some sectors.
According to the survey, 54% of the respondents reported that labour and material costs are rising, but the number of companies experiencing rising costs continues to decline. During the period, the Orders Index slipped to 105. While this is still in expansionary territory, it is the lowest it has been since the start of the survey.
The Industry believes the military sector will grow 16% on average this year, followed by the aerospace sector and the communications sector which are both expected to grow by roughly 11%. The medical sector is expected to rise by 10%.
The automotive sector and industrial electronics sector are both expected to rise 5.6% while the consumer electronics sector is expected to decline 3% and the computer sector is expected to decline 7% in 2023.
“Over the next six months, electronics manufacturers expect to see continued increase in both labor and material costs,” said Shawn DuBravac, IPC chief economist, in a press release. “Meanwhile, backlogs, ease of recruitment, and profit margins are expected to contract.”
Note: For the report, IPC surveyed hundreds of companies from around the world, including a wide range of company sizes representing the full electronics manufacturing value chain.