Around the World
IPC: Rising Material and Labor Costs Still Affecting EMS
BANNOCKBURN, IL – Nine in 10 electronics manufacturers are currently experiencing rising material costs, while four-fifths are experiencing rising labor costs, according to IPC survey data released in July. Eighty percent of respondents reported they have increased pricing due to higher material and labor costs.

Data from IPC’s July report indicate forces exerting pressure on the global economy, and, conversely, the electronics manufacturing industry, include growing recession uncertainties, higher gasoline and food prices, geopolitical uncertainties, and China Covid policies and lockdowns exacerbating supplychain disruptions.

“Other risks remain acute,” said Shawn DuBravac, chief economist, IPC. “Inflationary pressures remain historically high in many parts of the world. While supply chains appear to be improving, pricing pressure remains stiff. This is hurting profitability for many businesses but also leading both businesses and consumers to hold off purchases in hopes that prices will normalize. Moreover, higher prices for things like gasoline are crowding out other purchases consumers and businesses might make. How these forces will evolve in the coming months adds to the long list of uncertainties around the globe that will continue to dominate the near-term outlook.”

Additional survey results indicate demand remains strong. More than half of survey respondents indicate orders will expand in the next six months. While some improvements to inventory are expected, ease of recruiting/finding skilled talent are likely to remain challenging. Electronics manufacturers have expressed concern around the future availability of labor, components, materials (especially metals) and semiconductors.

IPC surveyed hundreds of global companies, including a wide range of company sizes. (CD)