Busy Season is Upon Us but Keep a Close Watch on Geopolitics

WALT CUSTER AND JOHN CUSTER-TOPAI

CUSTER AND CUSTER
World manufacturing growth (as measured by the Global PMI) is slowing, but results vary by region (Chart 1). In August, the global PMI was 52.5 –still well into expansion territory. The USA is doing even better, but “how much better” is in question. The U.S. PMI is measured separately –both by IHS Markit (formerly Markit Economics) and the Institute for Supply Management (ISM). Per Chart 2 these two U.S. PMI values have recently diverged with IHS Markit showing slowing and ISM accelerating manufacturing activity.

It appears that the recent world economic bubble is slowly deflating (Chart 3), but the sky is not falling as PCBs, semiconductors, SEMI equipment and overall electronic equipment are still registering positive growth rates.

U.S. electronic equipment orders and shipments are near 6-year highs (Chart 4) and world semiconductor shipment growth (Chart 5) is still in double digits –but its regional growth rates have peaked. Global printed circuit shipments are strong and appear on track for over 6% growth this year (Chart 6).

World electronic equipment shipments are in the midst of their normal autumn “busy season” (Chart 7). Don’t mistake this annual pre-holiday season upturn for sustained organic growth.

Clearly business conditions are still good, but keep a close watch for signs of slowing. Don’t let a seasonal surge mask possible issues. Global trade conflicts and geopolitical instability remain as ongoing worries.

read more: http://smt-pcb-printed-circuit-electronics-manufacturing-news.globalsmt.net/books/cfeb/#p=48

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