North American EMS Industry Grows By 5%

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IPC reported its May 2024 findings on the industry growth compared to last month and last year.

On Friday, the global association for electronics manufacturing IPC revealed the industry trends from its North American Electronics Manufacturing Services (EMS) Statistical Program.

Based on the data findings on EMS sales growth, vertical market growth, the EMS book-

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to-bill ratio, 3-month and 12-month sales outlooks, the report found out that in May 2024, total shipments in the North American EMS sector increased by 5.0% year-on-year and 3.7% compared to the previous month. 

On the other hand, EMS bookings rose by 2.6% compared to May of the previous year but declined by 16.2% in the prior month.

The report also states that the book-to-bill ratio stands at 1.36 as of May. This ratio is calculated by comparing the number of new orders received (booking) to the goods shipped or billed to the customers. 

A ratio exceeding 1.00 suggests that current demand outpaces supply, indicating potential sales growth over the next three to twelve months. Conversely, a ratio below 1.00 signifies the opposite.

In this report, book-to-bill ratios were derived by dividing the total value of orders received over the past three months by the total value of sales invoiced during the same period from companies included in IPC’s survey. 

Year-on-year and year-to-date growth rates provide a view of industry expansion. Due to seasonal fluctuations and short-term market volatility, consecutive-month comparisons vary. Fluctuations in month-to-month book-to-bill ratios are meaningful only if a trend lasts for more than three consecutive months, emphasising the importance of monitoring both bookings and shipments to interpret changes in the ratio.

Shawn DuBravac, IPC’s chief economist, has noted the resilience of the North American EMS industry. In his official statement, he commented, “Shipments and orders moved higher in May, but lower order growth compared to a year ago speaks to the headwinds facing the sector today.”

IPC’s monthly EMS industry data relies on information from a representative group of assembly equipment manufacturers operating in the USA and Canada. At the end of each month, IPC releases the EMS book-to-bill ratio.

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