April PCB number disappoint: no recovery yet as U.S. book-to-bill slips again to 0.94 - Components - IPC report on printed circuit boards - Statistical Data Included

Electronic News, June 3, 2002 by Bernard Levine

Those hoping for a 2002 upturn didn't get good news from the latest U.S. printed circuit board (PCB) book-to-bill numbers, which showed another drop instead.

The domestic PCB industry book-to-bill ratio slipped in April to 0.94, following March's drop to 0.98. The ratio, which had been negative throughout 2001, edged above parity in January at 1.01 but fell to exactly 1.00 in February.

Many had been hoping that March's slide into negative numbers would be short-lived, with the ratio returning to parity, or starting to inch up. But April's numbers went in the wrong direction instead and, now the question is: What will May and the rest of the year bring?

"April was disappointing," according to John Hassman, market research manager at the IPC -- Association Connecting Electronics Industries, which puts out the PCB book-to-bill numbers. "We were expecting it to reach parity. It looks like end-user demand is still not there. Earlier in the year, inventories were being replaced. Now, we are still not seeing an uptick in demand."

Nevertheless, "we are still optimistic there will be improvement in the PCB book-to-bill later in the year," Hassman said.

And there is some good news in the April numbers, he added. "Even though the book-to-bill is down, bookings are not down as much in April percentage-wise compared to earlier in the year."

In other findings from its monthly statistical program, the Northbrook, Ill.--based IPC noted that sales billed (shipments) in April 2002 decreased 31.5 percent from April 2001 and orders booked decreased 10.9 percent from April 2001.

Compared to 2001, bookings of PCBs are down 27.2 percent year-to-date, while shipments of PCBs are down 37.6 percent year-to-date.

The PCB book-to-bill ratio is calculated by averaging the number of orders booked over the past three months and dividing by the average sales billed during the same period.

Also in April, according to figures recently released by the EIA's Electronic Components, Assemblies & Materials Association (ECA), component orders stayed positive, but the rate of upward growth slowed compared to earlier in the year.

Meanwhile, the PCB Business Report, an IPC statistical report that tracks the dynamics of the U.S. PCB industry, reported the PCB shipment index was 131.9 and the PCB booking index was 123.7 for April 2002. The IPC PCB shipment index in April 2002 decreased 13 percent from 151.6 in March 2002, and the IPC PCB booking index in April 2002 decreased 15.9 percent from 147 in March 2002.

The index shows how current PCB shipments and bookings relate to an index point, 1992, a stable growth year for U.S. PCB manufacturers. A shipment index number of 117, for example, indicates that shipments are 17 percent higher than average shipments for the same time period in 1992.

The indices are calculated by setting the base year (1992) equal to 100 and then multiplying the monthly growth rates of the actual shipments and bookings by the corresponding index number.

[GRAPH OMITTED]

IPC Book-to-Bill Ratio

3-Month Average Bookings/Shipments

Apr-01  0.63
May-01  0.66
Jun-01  0.74
Jul-01  0.90
Aug-01  0.94
Sep-01  0.89
Oct-01  0.86
Nov-01  0.87
Dec-01  0.94
Jan-02  1.01
Feb-02  1.00
Mar-02  0.98
Apr-02  0.94

SOURCE: IPC

Note: Table made from bar graph