Electronics Industry Continues to Show Solid Performance Though Materials, Labor and Freight Costs Expected to Rise in 2023

Reading time ( words)

Per IPC’s February 2023 Global Sentiment of the Electronics Supply Chain Report, over the next six months, manufacturers expect to see continued increase in both labor and material costs, although to a lesser extent than previously anticipated. On a positive note, backlogs are expected to decline.

Among other data, survey results show:

  • On average, electronics manufacturers expect labor costs to increase 9.2 percent over 2022 levels; materials costs to rise 9.9 percent during the year and most surprisingly, they expect freight costs to rise 7.2 percent in 2023. “Though manufacturers anticipate freight costs to rise, depressed demand and improving supply chain dynamics are currently pulling freight costs down, a trend that should continue during the year,” said IPC Chief Economist Shawn DuBravac. “Downward cyclical pressures will curtail volume which should keep prices in check. For some companies, declining freight costs are likely to be their most significant cost savings in 2023.” 
  • Regarding digital project initiation, roughly 14 percent reported ERP system implementation and enhancements were their number one project for 2023. Other top projects include equipment/tools/resources/technology investment and upgrades and pursuit of CMMC certification.
  • Profit margins are expected to decline at a significantly higher rate in APAC vs. North America. 42 percent of manufacturers in APEC anticipate profit margins to decline, while on 15 percent of North American manufacturers are expecting the same.

For the report, IPC surveyed hundreds of companies from around the world, including a wide range of company sizes representing the full electronics manufacturing value chain. View full report.


Suggested Items

Christina Trussell: The Sky’s the Limit

03/14/2023 | Patty Goldman, I-Connect007
Christina Trussell is a harness design engineer at Blue Origin and a recipient of the IPC Rising Star Award. Since she was a young child, she wanted to fly through the skies. In this interview, she talks about her dreams and what it’s like to work in the electronics industry.

Another Successful STEM Outreach

02/27/2023 | Charlene Gunter du Plessis, IPC Education Foundation
The IPC Education Foundation (IPCEF) hosted its annual STEM Outreach Event over the course of two days at IPC APEX EXPO 2023 in San Diego, accommodating more than 550 students on Wednesday, Jan. 25 and Thursday, Jan. 26. This was IPCEF’s largest event to date. The event created awareness of the many careers available in the electronics manufacturing industry and helped future talent engage and connect with industry professionals.

The First India Pavilion

12/19/2022 | Gaurab Majumdar, IPC
For the first time, IPC APEX EXPO will host an “India Pavilion,” showcasing 16 Indian companies promoting India’s electronics manufacturing capabilities. The initiative was undertaken by the Ministry of Commerce & Industry, Government of India, and implemented by the Indian government agency, Electronics and Computer Software Export Promotion Council (ESC) India.

Copyright © 2023 I-Connect007 | IPC Publishing Group Inc. All rights reserved.