January 2025

Warm regards,
Thiago Guimarães
Director of Industry Intelligence, IPC

From Shawn DuBravac, IPC chief economist:
The economic landscape has undergone a notable shift over the past month. The Federal Reserve, as widely anticipated, lowered its target range for interest rates by 25 basis points. However, the bigger story lies in its updated outlook: while September projections anticipated 100 basis points of rate cuts in 2025, the Fed now signals only 50 basis points. This adjustment reflects the reality that progress against inflation has slowed, requiring a more cautious and deliberate approach. As I've written consistently over the past year, rates will likely remain elevated for longer than many anticipated—and the market is starting to catch up to this view.
 
In line with this recalibration, the 10-Year Treasury yield has surged by 100 basis points since September, even as the Fed reduced rates by 100 basis points. Mortgage rates have followed suit, climbing back toward 7%, marking their highest levels in six months.
 
The VIX index—commonly referred to as the "fear gauge"—has been inching higher. While it’s typical for investors to have a greater risk appetite at the start of the year, the rising VIX suggests jitters in the market, compounded by uncertainty surrounding the economic and political landscape.
 
The upcoming presidential term is beginning to inject a significant dose of unpredictability into the markets and the markets are starting to grapple with what to expect. President Trump has made a number of promises for Day 1 including, rolling back environmental policies, including terminating EV incentives and offshore wind projects, implementing tariffs and pursuing aggressive deportation measures.
These diverse and sweeping promises have left markets grappling with potential ramifications—what will and won’t happen come Day One. Until there is more clarity, uncertainties will loom larger, influencing both sentiment and broader economic dynamics.

EMS:
“North American EMS Industry Up 10.6 Percent in November”
North American EMS shipments rose 10.6% year-over-year in November 2024, with a book-to-bill ratio of 1.18 signaling continued strong demand despite recent booking slowdowns.

PCB:
“North American PCB Industry Sales Up 4.7 Percent in November”
North American PCB shipments increased 4.7% year-over-year in November 2024, with a book-to-bill ratio of 1.15 driven by a 29.1% surge in bookings compared to the previous year. This marks the highest PCB book-to-bill level in over two years, signaling strong demand momentum heading into 2025.

Global Sentiment:
“The Current Sentiment of the Global Electronics Manufacturing Supply Chain”
IPC’s December 2024 Global Sentiment Report indicates continued contraction in the electronics manufacturing industry, with demand weakening for the fourth consecutive month despite a modest rise in backlog levels. Persistent cost pressures, including rising labor and material costs, remain a significant challenge, as 53% of manufacturers report increases in labor costs and 45% in material costs.

DMA White Paper:
“Why Double Materiality Assessments Matter: Compliance and Competitive Advantage”
This white paper provides a comprehensive guide for electronics companies to navigate the EU’s Corporate Sustainability Reporting Directive (CSRD) by leveraging double materiality assessments (DMAs) to address dual reporting obligations, enhance sustainability, and gain a competitive edge.

2025 Predictions Blog by John Mitchell
“Looking Ahead: 2025 Predictions in Manufacturing, AI, and Beyond”
IPC’s 2025 predictions by CEO John W. Mitchell highlight a transformative year for the electronics industry, emphasizing AI as a collaborative tool, greener electronics as a consumer priority, and skills-based workforce evolution over degrees. With electronics gaining recognition as critical infrastructure, the industry is poised for advancements that blend sustainability, innovation, and people-focused progress.

Industry Intelligence Year End Recap
IPC provided a full year in review piece, which can be found on the IPC blog. In this review, industry intelligence was specifically highlighted, which can be found here.

IPC industry intelligence aims to provide valuable insights into the entire global electronics ecosystem. Through in-depth reports and expert analysis, industry thought leaders provide trend evaluations designed to benefit the electronics manufacturing industry. Learn more and explore IPC’s industry intelligence today.

Contact the team: Shawn DuBravac, Chief Economist; Thiago Guimarães, Industry Intelligence Director; and Kate Koger, Public Affairs Coordinator.