Weekly Global Update for July 11, 2012
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U.S. Electronic Equipment May Shipments, Orders and Inventories
The U.S. Department of Commerce just issued its durable goods report for May.
Following are some results for the electronics sector:
- Electronic equipment boot-bill ratio was 1.07 for May (3-month average basis) and 1.06 for May alone.
- Electronic equipment orders were sequentially flat (February to May) but remained well above shipments. (Chart 2)
- Electronic equipment 3/12 order growth was +7% comparing March-May 2012 versus the same months in 2011. (Chart 3)
- The ratio of electronic equipment inventories/orders remains well controlled. (Chart 4)
- Aircraft and parts shipments rose from April to May. (Chart 5)
- Defense capital goods orders, shipments and their book-to-bill are generally deteriorating. (Charts 6 & 7)
- Communication (Chart 8) and computer (Chart 9) equipment orders are rising modestly.
- Electronic equipment and semiconductor shipment 3/12 growth is in balance. (Chart 10)
IPC Releases North America PCB Industry Results for May 2012 (Charts 11-19)
Rigid PCB shipments were down 1.9% in May 2012 from May 2011, but bookings increased 12.0% year over year. Year to date, rigid PCB shipments decreased 5.0% and bookings increased 3.1%. Compared to the previous month, rigid PCB shipments were up 2.0% and rigid bookings gained 1.9%. The book-to-bill ratio for the North America rigid PCB industry in May 2012 remained above parity at 1.02.
Flexible circuit shipments in May 2012 were down 10.0%, and bookings were down 1.1% compared to May 2011. Year-to-date, flexible circuit shipments decreased 9.1% and bookings decreased 2.1%. Compared to the previous month, flexible circuit shipments decreased 2.6%, but flex bookings were up 19.8%. The North America flexible circuit book-to-bill ratio remained high at 1.17.
For rigid PCBs and flexible circuits combined, industry shipments in May 2012 decreased 2.6% from May 2011 and orders booked increased 10.6% from May 2011. Year-to-date, combined industry shipments were down 5.3% and bookings were up 2.6%. Compared to the previous month, combined industry shipments for May 2012 increased 1.7% and bookings increased 3.3%. The combined (rigid and flex) industry book-to-bill ratio in May 2012 decreased slightly but continued in positive territory at 1.03.
“North America PCB sales and orders in May continued slightly below last year’s levels and reflected normal seasonal patterns,” said Sharon Starr, IPC director of market research. “The May book-to-bill ratio remained positive for the sixth consecutive month and was especially strong for the flexible circuit segment of the industry. This reinforces our hope that sales will gain strength in the second half of this year.”
Taiwan Motherboard Vendors Lower Shipment Forecast for 3Q’12
Some motherboard vendors, in view of lower than expected demand in the China market, have downward adjusted their forecast shipment growth for the third quarter of 2012, a traditional peak period, from 20-25% to 10-15%.
Unfavorable market conditions in the U.S. and Europe, and consumers waiting for the launch of Windows 8 products have minimized peak season effects for the third quarter.
Taiwan's Manufacturing Sentiment Declines as Exports Slump
The business gauge for the local manufacturing sector plummeted at the fastest monthly pace in three-and-a-half years in May, pressured by the lingering Eurozone debt crisis and weaker economic growth in China and other emerging markets.
The outlook for the next six months also dimmed as 35.1% of respondents in a separate survey turned bearish about their businesses, a spike from 20.9% in a similar survey in April.
About 20% of locally made products are exported to Europe directly from Taiwan, or re-exported from China, highlighting the significant impact from weakness in Eurozone economies, the Taiwan Institute of Economic Research (TIER) said.
The latest surveys indicate that "the worst is not over yet," Gordon Sun, director of TIER's economic forecasting center, told a media briefing.
"It is not like the v-shaped recovery Taiwan experienced in 2009, it feels like walking in a long tunnel without knowing where the end is," Sun said.
South Korea Cuts Growth Forecast, Cites EU crisis
South Korea reduced its growth estimate for 2012 and announced 8.5 trillion won in spending to support the economy.
South Korea’s GDP may expand only 3.3% this year, less than a December estimate of 3.7%.
Source: South Korean Government Data
U.S. GDP Grew at a 1.9% Annual Rate in 1Q’12 (Chart 20)
The Commerce Department stated that that the U.S. economy grew at a 1.9% annual pace in the January to March period.
U.S. Consumer Confidence Declined in June to 5-Month Low (Chart 21)
The Conference Board's index of Consumer Confidence dropped for a fourth consecutive month, to 62 in June from a revised 64.4 in May.