Rising material and labor costs continue to drag the world down

BANNOCKBURN, Ill., USA, December 30, 2021 (GLOBE NEWSWIRE) – IPC’s January 2022 Global Electronics Manufacturing Supply Chain Report found that material and labor costs Work continues to be the biggest problem facing the electronic supply chain, at nine in ten. electronics manufacturers report increased material costs and more than three-quarters report increased labor costs. Although order flows remain strong and capacity utilization and shipments are increasing, survey respondents reported growing order books and declining profit margins.

Among other findings, the survey results revealed that:

  • Materials costs are currently increasing at a faster rate in North America than in APAC: 96% of North American manufacturers report increasing material costs, while 74% report material costs are on the rise. rise in APAC.
  • Inventory available to customers is declining faster in North America than in Europe and APAC: 49% of businesses in North America reported declining inventories, while only 21% of businesses in Europe and 16% of businesses in APAC are experiencing declines.
  • Manufacturers say the current semiconductor shortage is causing longer delivery times, delayed deliveries, falling orders, increased inventory, rising costs, and lost production. Combined, these impacts affect the ability of manufacturers to complete orders, ultimately reducing profitability.

“Manufacturers expect continued rise in material and labor costs,” said Shawn DuBravac, chief economist of IPC and author of the report. “Escalating costs in turn squeeze profit margins. The ease of recruiting and finding qualified talent is expected to remain difficult, and inventory levels are expected to remain tight for at least the next six months. “

IPC surveyed hundreds of companies around the world, including a wide range of sizeable companies and representing the entire electronics manufacturing value chain. Respondents to the survey came from North America (44%), Asia (20%) and Europe (17%).

View Full Report: The Current Sentiment of the Global Electronics Manufacturing Supply Chain.

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About the IPC

IPC (www.IPC.org) is a global industry association based in Bannockburn, Ill., Dedicated to the competitive excellence and financial success of its 3,000 member company sites that represent all facets of the industry. electronics, including the design, manufacture of printed boards, electronic assembly and testing. As a member-driven organization and a primary source of industry standards, training, market research and public policy advocacy, the IPC supports programs aimed at meeting the needs of an estimated global electronics industry. 2,000 billion dollars. IPC has additional offices in Washington, DC; Atlanta, Georgia; Miami, Florida; Brussels, Belgium; Bangalore and New Delhi, India; Bangkok, Thailand; and Qingdao, Shanghai, Shenzhen, Chengdu, Suzhou and Beijing, China.


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