IPC - book-to-bill ratios and business report for August 2004

The North American PCB Industry Book-to-Bill Ratio for August 2004 continued positive at 1.04.

This ratio is based on monthly data collected from both rigid PCB and flexible circuit producers that participate in IPC's monthly PCB Statistical Program.  Separately, the book-to-bill ratios in August 2004 were 1.05 for rigid PCBs and 0.98 for flexible circuits.

The ratio is calculated by dividing the value of orders booked over the past three months by the value of sales billed during the same period from the companies in IPC's survey sample.  A ratio of more than 1.00 suggests that current demand is ahead of supply, which indicates probable near-term growth.

Total Industry Growth

For rigid PCBs and flexible circuits combined, industry sales billed (shipments) in August 2004 increased 33.6 percent from August 2003, and orders booked increased 9.8 percent from August 2003.  Compared to 2003, shipments of PCBs are up 34.7 percent year-to-date, while bookings of PCBs are up 38.0 percent year-to-date.  Combined industry shipments for August 2004 are up 13.8 percent over the previous month, and bookings are down 0.3 percent over the previous month.

Both rigid and flex shipments are rebounding from the recession and are showing strong growth, but flex is growing at a faster rate than rigid.

Rigid PCB Growth

Rigid PCB shipments are up 21.9 percent and bookings are up 8.7 percent in August 2004 from August 2003.  Year-to-date, rigid PCB shipments have increased 25.1 percent and bookings have increased 21.1 percent compared to the same period in 2003.  Rigid PCB shipments from the survey sample increased 15.2 percent from the previous month and rigid bookings increased 7.6 percent from the previous month.

Flexible Circuit Growth

Flexible circuit shipments are up 75.2 percent and bookings are down 19.3 percent in August 2004 from August 2003.  Year-to-date, flexible circuit shipments have grown 77.4 percent and bookings have grown 100.7 percent compared to the same period in 2003.  Compared to the previous month, flexible circuit shipments from the survey sample increased 8.5 percent and flex bookings decreased 27.1 percent.

Interpreting the Data

Flexible circuit sales, which include some value-added services in addition to the bare flex circuits, represent about 17 percent of total PCB sales in IPC's survey sample, which IPC considers to be representative of the industry.  It is difficult for most flexible circuit manufacturers to break out value-added services, such as assembly, from their circuit sales.  Therefore, the amount of value-added services included in this industry segment's sales is not known.

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 may reflect cyclical effects.  Because bookings tend to be more volatile than shipments, changes in the book-to-bill ratios from month-to-month may not be significant unless a trend of three consecutive months or more is apparent.

The information in IPC's monthly industry statistics is based on data provided by a representative sample of both rigid and flexible PCB manufacturers in the U.S. and Canada.  IPC publishes the PCB Book-to-Bill Ratio and the Interconnect Manufacturing Services (IMS) Business Report each month.  Statistics for the previous month are not available until the last week of the following month.

For more information, contact IPC Director of Market Research Sharon Starr at SharonStarr@ipc.org or 847-790-5317.

Download graphs here:

Rigid/Flex: http://www.emsnow.com/cnt/files/Graphics/RIGIDFLEX_graphs_08_04.pdf

Book to Bill: http://www.emsnow.com/cnt/files/Graphics/08_04_IPC_btb.pdf