BANNOCKBURN, IL – Electronics manufacturers experiencing supply disruptions report they expect five-week shipment delays on average, but a majority of electronics manufacturers and suppliers expect business operations to be “back to normal” by July, according to a new IPC survey. Collectively, 75% of all respondents expect business to be back to normal by October.
“Although manufacturers and suppliers continue to be hampered by the impacts of the coronavirus, most companies do not intend to make major cuts in capital expenditures, which suggests companies anticipate demand returning,” said John Mitchell, IPC president and CEO. “The delays will certainly impact sales for segments of electronics manufacturing, with consumer electronics likely to be the most impacted sector, followed by industrial and automotive.”
Additionally, most respondents expect sales to decline in the first and second quarters and for the entire 2020 calendar year. Roughly 56% of respondents expect sales to fall in the first quarter; 63% expect sales to decline in the second quarter, and 62% expect sales to be down for 2020.
Nearly 40% of respondents are feeling worse about the impact of Covid-19 on their businesses than they were last month. Roughly 69% of respondents report being told by suppliers that there will be delays in shipments due to Covid-19, and some delays are growing.
Most respondents report they are identifying alternative sources of inputs (55%) and cutting back business travel (54%). Nearly 30% of firms are encouraging teleworking where possible.
Roughly 26% of respondents expect to cut capital expenditures in 2020, while 63% report capital investment will remain the same.
Almost half of survey respondents represent the contract electronics manufacturing services industry. This segment performs an estimated 25% of North American electronics manufacturing for OEMs.