Electronics industry continues to show resiliency despite rising labour costs and recruiting difficulties

2nd February 2023
Harry Fowle

According to IPC’s January Sentiment of the Global Electronics Manufacturing Supply Chain report, 75% of manufacturers are experiencing rising material costs, while 74% indicate that labour costs are on the rise.

At the same time, profit margins, inventory from suppliers and ease of recruitment are presently declining, though the ease of recruitment is rising at a faster pace in APAC and Europe than in North America.

With potential risks on the horizon including the threat of weak product demand leading to undesirably high levels of inventory, overall industry sentiment shows surprising resiliency per the January report.

In IPC’s January Economic Outlook report, IPC’s Chief Economist Shawn DuBravac forecasts a looming recession in both the United States and throughout Europe, but the timing is still uncertain. On the positive news front, both the United States and Europe reported better economic growth during Q4 2022 than had been expected, but both economies are slowing.

“In the last month, we have marginally raised our forecasts for economic growth for both the U.S. and Europe but our expectations remain muted,” said DuBravac. “We expect the U.S. economy to grow 0.5% in 2023 (up from 0.3% last month) and we expect Europe will decline 0.1% in 2023, up from last month’s forecast of a 0.3% decline. The loosening of strict COVID restrictions in China will also add growth there and we now expect China’s economy to expand 4.7% in 2023.”

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