July Preliminary PMI Leading Indicator Results from Markit Economics (Chart 1)

U.S. "Flash" PMI 53.8 in July from 53.6 in June (Chart 2)

Commenting on the flash PMI data, Chris Williamson, Chief Economist at Markit said:

"A modest upturn in the headline manufacturing PMI belies some more worrying undercurrents which point to potential weakness in coming months.

"Companies saw output and order book growth regain a little momentum at the start of the third quarter, but the overall pace of expansion was nevertheless the second-weakest seen since the government shutdown of 2013.

"Manufacturing has been stuck in a lower gear in recent months compared to the strong expansion seen through much of last year, linked to weak exports and uncertainty about the economic outlook at home and abroad.

"Although export orders showed the first rise since February, the rise was only very modest, blamed by companies on the appreciation of the dollar and sluggish global demand.

"Disappointing order book growth has taken its toll on companies’ expansion plans. Not only did firms scale back their input buying compared to prior months, with July seeing the smallest increase since the start of last year, hiring has also been hit, with headcounts rising at the slowest rate for three months.

"Weak demand, as well as reduced import costs arising from the strong dollar, meanwhile also continued to help drive down inflationary pressures.

"The survey data therefore suggest there’s little to worry policy makers from an inflation perspective, and that the forward-looking indicators point to the manufacturing sector remaining in a relatively slow-growth phase."


Eurozone "Flash" PMI 52.2 in July vs. June's 52.5 (Chart 3)

Chris Williamson, chief economist at Markit, noted that Eurozone economic growth lost only slight momentum in July amid the rollercoaster events of the Greek debt crisis during the month. The rate of expansion remained reassuringly robust to suggest that it was by-and-large ‘business as usual’ for the region as a whole.

"The PMI suggests the Eurozone continues to enjoy its strongest performance in terms of both economic growth and job creation seen over the past four years. The survey indicates that the economy grew 0.4% in the second quarter and sustained this steady pace at the start of the third quarter. "Although business confidence in the service sector hit the lowest so far this year, recent positive developments in relation to Greece suggest the pace of growth could pick up again in coming months. The region should therefore enjoy growth of at least 1.5% this year providing there is no re-escalation of ‘Grexit’ worries, which is of course by no means assured.

"Deflation worries should also be allayed further by average prices charged for goods and services steadying in July, the survey gauge rising tantalizingly close to the neutral level to buoy hopes that August will see prices rising for the first time in three-and-a-half years."

Japan "Flash" Manufacturing PMI rose to 51.4 in July from 50.1 in June (Chart 4)

Amy Brownbill, economist at Markit, said "operating conditions in the Japanese manufacturing sector improved in July. Production rose at the quickest rate since February, while new order growth was the second-strongest this year so far. Subsequently employment rose at the fastest rate since December 2014 and buying activity growth resumed.

"Meanwhile, reports of the falling yen against the dollar led to greater cost pressures, as input price inflation was the strongest in three months. That said the rate of inflation remained weak in the context of historical data.

China's "Flash" PMI dropped to 48.2 in July from 49.4 in June (Chart 5)

Activity in China's factory sector contracted at the fastest pace in 15 months. Fears of faltering commodity demand in China further pressured resource prices

Source: www.markiteconomics.com

Worldwide smartphone market shipments expanded 11.6% y/y to 337.2 million in 2Q’15 (Charts 6-8)

Worldwide mobile phone market (inclusive of smartphones) vendor shipments fell -0.4% to 464.6 million units in 2Q’14

According preliminary data from the International Data Corporation (IDC), vendors shipped a total of 337.2 million smartphones worldwide in 2Q’15, up 11.6% from the 302.1 million units in 2Q’14. The 2Q’15 shipment volume represents the second highest quarterly total on record. Following an above average first quarter (1Q’15), smartphone shipments were still able to remain slightly above the previous quarter thanks to robust growth in many emerging markets.

In the worldwide mobile phone market (inclusive of smartphones), vendors shipped 464.6 million units, down -0.4% from the 466.3 million units shipped 2Q’14.

Source: www.idc.com

North America-based SEMI Equipment Manufacturers’ June 2015 Orders and Shipments (Charts 9 & 10)

SEMI reported that the 3-month average of worldwide bookings in June 2015 was $1.51 billion, 2.6% lower than May 2015, and 3.5% higher than June 2014.

The 3-month average of worldwide billings in June 2015 was $1.54 billion, 1.0% lower than May 2015 and 16.2% higher than the June 2014.

"The June book-to-bill saw slight declines in the three-month averages for both booking and billings compared to May," said Denny McGuirk, president and CEO of SEMI. "Both figures, however, are above the trends reported one year ago and the first half of the year has been one of positive growth."

Source: www.semi.org

Global LED Lighting Production Value US$28.8 billion in 2014

Global LED lighting production value in 2014 is estimated at US$28.8 billion, accounting for 26.3% of total production value for all types of lighting products, according to Taiwan-based Photonics Industry and Technology Development Association (PIDA).

Global LED lighting penetration is expected to rise to over 30% in 2015, PIDA said.

The global 10 largest lighting vendors by revenues in 2014 were Philips, Osram, Panasonic, General Electric, Acuity Brands, Zumtobel, Toshiba, Cooper Lighting, Cree and Hubbell, PIDA indicated. Of the 10 largest vendors, Cree was the one that only sold LED lighting products.

Source: www.digitimes.com

Global Dual-SIM Smartphone Sales to grow to 514 Million Units in 2016

Global dual-SIM smartphone sales will grow 19% from 431 million units in 2015 to 514 million in 2016. Almost one in three of the 1.6 billion smartphones sold globally in 2016 will be dual-SIM models, according to data compiled by Strategy Analytics.

China and India are by far the two largest country markets for dual-SIM smartphones worldwide. Dual-SIM smartphones are popular in China and India because they allow consumers to select the cheapest tariff rates for voice or data plans, as well as access better cellular coverage without roaming charges, said Linda Sui, director at Strategy Analytics.

Leading smartphone vendors, such as Samsung Electronics, Lenovo and Micromax, are focusing on marketing their dual-SIM Android models in China and India. Meanwhile, Apple is missing out on a huge half-billion-unit global market for not offering a dual-SIM iPhone, said the research firm.


Copper at Lowest Price since 2009 (Chart 11)

Copper declined to its lowest price since 2009 as demand is slowing in China, the world's largest metals consumer.

Source: http://futures.tradingcharts.com/chart/CP/B9

Walt D. Custer

Walt Custer

Walt Custer is an industry analyst focused on the global electronics industry. Prior to forming Custer Consulting Group he was Vice President of Marketing and Sales for Morton Electronic Materials, a global supplier of specialty chemicals and process equipment for the PCB industry.

Custer has been a member of the IPC trade organization since 1975 where he received both the President's and the Raymond E. Pritchard Hall of Fame Awards. He is currently a member of the IPC Executive Market & Technology Steering Committee. Custer is also a Director of the EIPC European PCB trade organization.

He authors regular “Market Outlook” columns for Global SMT & Packaging magazine, the Journal of the HKPCA and the TTI MarketEYE website.

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