Purchasing Managers Optimistic as 2015 Comes to Close

Purchasing Managers Optimistic as 2015 Comes to Close

After slowing in October, business confidence among buyers of electronic components improves slightly in November, as most report steady conditions despite a normal holiday slowdown.

Global Purchasing’s monthly business confidence index remained in positive territory in November, inching up slightly following a 13% decline in October.  The monthly index registered 111, indicating that most buyers of electronic components are optimistic about business conditions as the year closes.

A Global Purchasing Index reading of 100 or above indicates economic optimism among buyers of electronic components; a reading below 100 indicates pessimism.

Buyers reported steady conditions across most of the GPI indices in November. The GPI new orders and pricing indices remained virtually flat, while buyers reported a slight increase in inventory and a slight decrease in purchasing activity. Buyers reported longer lead times for many of the components they purchased during the month.

“Demand is still steady,” said one GPI panel member.

“It is a bit slower, but normal for around the holidays,” another panel member commented.

The GPI new orders index inched up 2% compared to October while the prices index increased just 1%. Inventories inched up, as the inventories index grew 4%, indicating that buyers have more inventory on hand. Purchasing activity was down slightly, as the purchasing index fell 3%. The lead times index increased 5%, indicating that buyers are experiencing longer lead times for some components. Lead times had remained fairly steady throughout the summer and into the fall, although some buyers reported experiencing shorter lead times during October—the GPI lead times index fell 7% from September to October.

Although electronic components buyers remain confident, the November total GPI is down 9% compared to the same period a year ago. Confidence had remained strong well into the fall of 2014 before dipping below the 100-point mark last December.

The monthly Global Purchasing Index measures optimism among buyers at original equipment manufacturing (OEM), contract manufacturing (CM), and electronics manufacturing services providers (EMS). A reading above 100 indicates optimism, and a reading below 100 indicates pessimism. The GPI measures business activity in five areas: new orders, inventory levels, electronic component purchases, prices, and lead times.

TAGS: Supply Chain
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