A monthly benchmark that gauges purchasing professionals’ views on procurement activity in the electronic components marketplace. A reading below 100 indicates pessimism; a reading above 100 indicates optimism.

Gauge

GPI up 3.4% in October

New orders continue to grow and purchasing activity is on the rise, as electronic components buyers maintain optimistic outlook.

Chart 2The Global Purchasing Index continued its upward climb in October, rising 3.4% compared to September, and indicating continued optimism among buyers of electronic components. Surveyed in October, Global Purchasing’s panel of 100 buyers revealed a GPI of nearly 123, its highest level since launching in January and well above the 100-point threshold indicating a positive economic outlook. After falling in July, the GPI has risen consistently through late summer and early fall, rising 1% in August, 1.7% in September, and now more than 3% in October. Panel members reported a slight increase in new orders from customers, higher inventories, and steady lead times. They also indicated that they purchased more components from their suppliers during the month and that prices for those components were generally lower.

Overall, buyers said the upward momentum in the electronic components industry continues and that they remain optimistic into 2015.

“We are experiencing spike orders that are not customary for this time of year,” said one panelist. “That’s a good thing.”

“Recent increases in bookings are largely for products requested for delivery in 2015 and beyond,” another panelist said.

New Orders, Inventories Up

New orders from customers inched up less than 1% in October, essentially maintaining the 10% gain purchasers reported in September. The September increase in new orders was the largest in the GPI’s 10-month history, and came after a 9% reported decline in August. The inventories index rose roughly 7%, as buyers reported higher inventory levels during the month. This followed a 7% decline in the inventories index in September, when buyers reported having less inventory on hand.

Chart 3

Purchasing activity continued to grow, as buyers reported placing more orders with their suppliers during the month. The new component purchases index rose 4%, following a 4% gain in September, and a 6% gain in August. This followed a 7% decline in the new component purchases index in July.

Chart 4

Buyers also reported a continued trend toward lower pricing for components, as the pricing index fell for the second straight month. The index fell 3% during the month, following a 5% decrease in September. Buyers reported that lead times remained steady at 2.3% in October; this follows a shortening of lead times since July, when the lead times index dropped 9%.

Global Purchasing’s GPI measures purchasing professionals’ business confidence in five areas: new orders from customers; electronic component inventory levels; purchasing activity; pricing; and lead times. 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 (OEM) or contract manufacturing firms around the world.

Global Purchasing’s GPI measures purchasing professionals’ business confidence in five areas: new orders from customers; electronic component inventory levels; purchasing activity; pricing; and lead times. 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 (OEM) or contract manufacturing firms around the world.

chart1

GPI up 3.4% in October

New orders continue to grow and purchasing activity is on the rise, as electronic components buyers maintain optimistic outlook.

chart2

The Global Purchasing Index continued its upward climb in October, rising 3.4% compared to September, and indicating continued optimism among buyers of electronic components. Surveyed in October, Global Purchasing’s panel of 100 buyers revealed a GPI of nearly 123, its highest level since launching in January and well above the 100-point threshold indicating a positive economic outlook. After falling in July, the GPI has risen consistently through late summer and early fall, rising 1% in August, 1.7% in September, and now more than 3% in October. Panel members reported a slight increase in new orders from customers, higher inventories, and steady lead times. They also indicated that they purchased more components from their suppliers during the month and that prices for those components were generally lower.

Overall, buyers said the upward momentum in the electronic components industry continues and that they remain optimistic into 2015.

“We are experiencing spike orders that are not customary for this time of year,” said one panelist. “That’s a good thing.”

“Recent increases in bookings are largely for products requested for delivery in 2015 and beyond,” another panelist said.

New Orders, Inventories Up

New orders from customers inched up less than 1% in October, essentially maintaining the 10% gain purchasers reported in September. The September increase in new orders was the largest in the GPI’s 10-month history, and came after a 9% reported decline in August. The inventories index rose roughly 7%, as buyers reported higher inventory levels during the month. This followed a 7% decline in the inventories index in September, when buyers reported having less inventory on hand.

chart3

Purchasing activity continued to grow, as buyers reported placing more orders with their suppliers during the month. The new component purchases index rose 4%, following a 4% gain in September, and a 6% gain in August. This followed a 7% decline in the new component purchases index in July.

chart4

Buyers also reported a continued trend toward lower pricing for components, as the pricing index fell for the second straight month. The index fell 3% during the month, following a 5% decrease in September. Buyers reported that lead times remained steady at 2.3% in October; this follows a shortening of lead times since July, when the lead times index dropped 9%.

Global Purchasing’s GPI measures purchasing professionals’ business confidence in five areas: new orders from customers; electronic component inventory levels; purchasing activity; pricing; and lead times. 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 (OEM) or contract manufacturing firms around the world.

Global Purchasing’s GPI measures purchasing professionals’ business confidence in five areas: new orders from customers; electronic component inventory levels; purchasing activity; pricing; and lead times. 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 (OEM) or contract manufacturing firms around the world.

Source: globalpurchasing.com

Victoria Kickham


Victoria Kickham

Victoria  Fraza Kickham is a Boston-based freelance writer covering manufacturing, distribution and supply chain issues. She is the former managing editor of Industrial Distribution magazine, and her articles also have appeared in The Electrical Distributor magazine, Globalpurchasing.com,
Electronic Design, and Machine Design magazines. Contact her at victoria.kickham@gmail.com and follow her on Twitter: @vfkickham.

View other posts from Victoria Kickham. View other posts from Victoria Kickham.
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