Global Purchasing Index Rises 6%

Global Purchasing Index Rises 6%

By Victoria Fraza Kickham, Distribution Editor

Buyers of electronic components remain upbeat about business in 2015. The monthly Global Purchasing Index rose 6% in March to a reading of 124.4, well above the 100-point mark indicating optimism among purchasing professionals. Global Purchasing’s GPI measures buyers’ confidence in five key areas: new orders from customers, inventory levels, purchasing activity, pricing, and lead times.

After dipping below 100 in December, the GPI has remained in positive territory since January.

“Bookings are up and business is steady closing out Q1,” said one GPI panel member surveyed this month. Others cited increased quote activity during the month.

New Orders, Inventory, Purchasing Activity All Up

Buyers said new orders from customers increased during March, as the new orders index rose 2%, indicating greater demand for a wide variety of end products. Electronic component inventories also increased during the month—the inventories index surged 11%--indicating that original equipment manufacturers (OEMs) and contract manufacturers (CMs) have more supplies on hand to support growing demand for their products. Buyers also reported an increase in their purchasing activity, as the purchasing index rose 6% in March, indicating that buyers are placing more orders for a variety of electronic components with their suppliers.

Prices Decline, Lead Times Lengthen

Buyers surveyed in March said they are paying lower prices for the electronic components they buy from suppliers, and also noted that lead times for many components lengthened during the month. The GPI prices index fell 7% to a reading of 2.06. This follows a 3% increase in the prices index in February and an 8% increase in January. Buyers had reported declining prices through much of the fall, before pricing began to creep up this year.

The lead times index rose 6% in March, indicating longer lead times for many of the electronic components buyers are purchasing. This followed a 7% decrease in the February lead times index.

Global Purchasing compiles the GPI data monthly from a survey of more than 100 panel members who buy a wide range of electronic components. Prequalified for their industry experience, panel members are purchasing executives, managers, or buyers at original equipment manufacturing or contract manufacturing firms around the world.