In Early Spring, Buyers Remain Confident

In Early Spring, Buyers Remain Confident

Purchasing managers cite higher component prices, positive outlook as second quarter begins.

Buyers of electronic components maintained their economic optimism through March, citing an increase in their purchasing activity during the month and steady orders from customers, according to a Global Purchasing survey of buyers.

Buyers’ confidence slowed compared to February, but remained above the survey’s 100-point mark indicating business optimism. The March reading fell 2.5% to a reading of 115.9.

“Orders have continued to rise in 2016,” said one executive interviewed for the survey.

“The market is looking better,” added another buyer.

When asked about new orders from their customers, buyers surveyed said ordering activity remained stable during the month. They cited a drop in their inventory levels, an increase in purchasing activity, and said they paid higher prices for many of the components they purchased during the month. Buyers also indicated experiencing shorter lead times for many of the components they purchase.

Commenting on pricing, one buyer said the “recent acquisition of Micrel by Microchip Technology caused painful price increases.”

Buyers surveyed cited growing confidence since the start of the year, with a survey reading of 115.4 in January that rose 3% to 118.8 before slowing to March’s 115.9.

Global Purchasing’s survey measures optimism among buyers at original equipment manufacturing (OEM), contract manufacturing (CM), and electronics manufacturing services providers (EMS). It measures business activity in five areas: new orders, inventory levels, electronic component purchases, prices, and lead times. Conducted in March, the survey polled a small sample of Global Purchasing’s buyer audience.

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