North American Printed Circuit Board Book-to-Bill Ratio Falls but Sales Growth Resumes



IPC — Association Connecting Electronics Industries’ November 2016 findings from its monthly North American Printed Circuit Board (PCB) Statistical Program showed that the PCB book-to-bill ratio fell below parity, to 0.99, while sales resumed slow but positive growth in November.
Total North American PCB shipments in November 2016 were up 0.6 percent compared to the same month last year. Year-to-date as of November, shipment growth is up 2.6 percent. Compared to the preceding month, November shipments increased 1.0 percent.
PCB bookings in November decreased 5.4 percent year-on-year, reducing year-to-date bookings growth to -0.6 percent. Compared to the previous month, orders in November 2016 were down by 3.8 percent.
“North American PCB orders have been more volatile than usual in the second half of 2016, causing volatility in the book-to-bill ratio,” said Sharon Starr, IPC’s director of market research. “Year-on-year growth in both orders and sales has been trending gradually downward since last spring’s minor recovery but, based on the mostly positive book-to-bill ratios of the last few months, modest sales growth seems likely to resume in early 2017,” she added.

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.

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