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IPC Releases January 2025 Global Sentiment of the Electronics Manufacturing Supply Chain Report
January 28, 2025 | IPCEstimated reading time: 1 minute
Demand in the electronics industry recovered to 100 in December, marking the threshold between contraction and expansion after four consecutive months below this level according to IPC’s January Sentiment of the Global Electronics Manufacturing Supply Chain Report. Of the four demand components, the Backlog Index remained below 100 and was the only component unchanged over the past month. The New Orders Index rose by four points to 102, moving marginally into expansion territory. Similarly, the Shipment Index increased by four points, reflecting broader improvements in volume indicators.
Cost pressures continue to challenge operations. The Labor Costs Index held steady this month, while the Material Costs Index climbed three points, recovering slightly from its all-time low. However, aggregated cost indicators reached a four-month high, signaling persistent cost pressures on operations.
In response to special questions regarding companies’ current work from home practices, minimal changes are expected in 2025 work arrangements. Factory floor policies remain rooted in traditional on-site requirements, reflecting the operational challenges and technical demands of these roles. Europe stands out with the largest flexibility increase, as hybrid arrangements are projected to grow by 5 percent.
“While 2025 work-from-home policies suggest incremental shifts toward flexibility, particularly in APAC and Europe, these changes are more pronounced for non-factory employees,” said Shawn DuBravac, Ph.D., IPC chief economist and report author. “For factory floor employees, minor increases in hybrid work are anticipated, but on-site roles remain the overwhelming standard, underscoring the rigidity of these positions,” Dr. DuBravac added.
Additional survey data show:
- Half of electronics manufacturers are currently experiencing rising labor (52 percent) and material (51 percent) costs.
- European electronics manufacturers, along with those operating globally, anticipate a decline in material costs over the next six months more so when compared to North American electronics manufacturers.
- Over the next six months, electronics manufacturers expect labor and material costs to remain high, with ease of recruitment likely to remain challenging.
These results are based upon the findings of IPC’s Current State of Electronics Manufacturing Survey, fielded between December 11 and December 31, 2024.
Read the full report.
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