Thanks to higher interest rates and other inflation-controlling efforts the world’s economies appear to be heading toward a ‘soft landing’ in 2007. Barring some global catastrophe no recession is on the horizon – just slower GDP growth.

In the USA electronic equipment orders and shipments are still on an upward trajectory while Japan remains relatively flat (after correcting for its strong, recurring monthly fluctuations. As we move into the consumer electronics driven autumn busy season the Taiwanese ODM companies (with major manufacturing in China) had a flat August but I assume will report much stronger sales in September. As leading indicators to SE Asian ODM activity, Taiwan motherboard and display producers saw revenues jump in August.

From a supply chain viewpoint, N America printed circuit boards and PCB process equipment have been outgrowing end market demand – signaling a likely downward correction. It appears that PCB growth is slowing but that the process equipment correction may lag by 1-2 quarters.

This column originally appeared in Global SMT & Packaging magazine 6.10 - November/December 2006.

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