KM CNC Machine Service
Published

Electronics and Consumer Goods

Electronics poised for a rebound; consumer goods production also should improve in 2015.

Share

Electronics Poised for Rebound
Our own business index shows that the electronics industry has generally been trending down since early 2014, and broader data on spending and production in the electronics industry shows that it has been struggling since 2013. But if you look back through the historical data, “struggling” for the electronics industry really just means slower growth, since the spending on and production of electronics almost never contracts.

However, the industry seems to be bottoming out and turning toward accelerating growth. An early leading indicator of this is that real disposable income has been growing faster and faster every month for nearly a year. In fact, disposable income is growing at its fastest annual rate in nearly two years, which also is virtually the fastest rate of income growth in almost seven years.

Disposable income tends to lead electronics spending by six to nine months. Incomes started moving in a positive direction in December 2013, and, sure enough, electronics spending started growing at an accelerating rate last fall and has continued to do so in recent months. Given the strength of the acceleration in disposable income, electronics spending should see significant growth in 2015.

Of course, production tends to lag consumer spending by about three months. Production of electronics appears to have bottomed out in the last month or two. Based on the leading indicators, it appears that production of electronic parts should grow at a rather rapid rate this year. This is a good sign for those that make molds for electronics and for the plastic processors that make parts for the electronics industry.


 

Consumer Goods Production Should Improve in 2015
Since the summer of 2014, consumer goods production has been growing at a slower and slower rate. I think that should change fairly soon, however. Just like with electronics spending, real disposable income is a good leading indicator of consumer goods spending, so with the surging growth in incomes over the last year, consumer goods spending has been growing at an accelerating rate. In fact, the current rate of growth in consumer goods spending is the fastest in almost three years.

The trend of accelerating growth in consumer goods spending should lead to accelerating growth in the production of consumer goods fairly soon, as in the next month or two. Therefore, consumer goods production could grow at an annual rate of 3-4 percent this year, which would be the fastest rate of growth in consumer goods production since 1999.

Related Content

Progressive Components
KM CNC Machine Service
MMT Today enews
Techspex
Maximum Mold Precision
MoldMaking Technology Magazine
Forget about long angle pins & hydraulic cylinders
Maximum Mold Precision
Progressive Components