Global Electronics Industry Sees Surge in Demand Despite Cost Pressures
The electronics manufacturing industry experienced a significant rise in demand, capacity utilization, and backlogs in February 2025, according to IPC’s Global Electronics Manufacturing Supply Chain Report. The Demand Index has reached its highest level since May 2024, reflecting strong growth momentum.
However, profit margins remain under pressure, despite the Profit Margin Index improving for the second consecutive month. Rising labor and material costs continue to challenge manufacturers, but shipments, orders, and capacity utilization are expected to strengthen, signaling industry optimism.
Limited Impact of Tariff Concerns on Shipments
With potential tariff risks looming, IPC surveyed manufacturers on whether they were pulling forward shipments to mitigate uncertainties. The findings reveal:
- 65% of companies are maintaining regular shipment schedules, not adjusting for tariff concerns.
- 18% of manufacturers have modified less than 10% of shipments.
- 72% of respondents have not faced unexpected shipping surcharges, and 70% do not anticipate additional surcharges in the next 60 days.
Challenges in Labor and Material Costs
- The survey highlights ongoing challenges in the industry:
- 56% of manufacturers report rising labor costs.
- 50% of companies cite increased material costs.
- North America faces the highest cost inflation, while skilled labor shortages have worsened globally.
The findings are based on IPC’s Current State of Electronics Manufacturing Survey, conducted between January 16 and January 31, 2025.
Source: EMS Now
