5-Year Rigid, Flex & Laminate Forecast
It is that time of year when we publish our major Rigid, Flex and Laminate forecasts out to 2019. Our forecasts show what we expect demand to be in 2016 and also in the medium term up to 2019.
FIGURE 1: WORLDWIDE SEMICONDUCTOR SHIPMENTS 2000-2015
Focusing first on the short term prospects, many of the economic measures and indicators are not good for the latter part of 2015.
- Japan for instance, has fallen back into recession as of the 3rd Quarter of 2015.
- US retail sales rose less than expected in October.
- In the US automotive sales fell, fueling fears that consumer spending could be hit in the fourth quarter, which accounts for more than two-thirds of US economic activity.
- US Consumer spending grew at 3.2% in the third quarter, but down from 3.6% in the second quarter. US consumer demand is a key driver for ensuring demand growth.
There are two further key factors that will impact upon the health of the global market for 2016:
1) Another headwind on global demand is the likely continuation of depressed oil and commodity prices which will affect the growth in many economies (a number of them emerging) over the next twelve months. The US situation, in many ways, will be supporting the demand in 2016 in sentiment at least, if not in reality.
2) The rebalancing of the PRC’s economy from export lead to a more balanced one, will also impact the global market. From an electronics perspective and inturn, PCBs and Laminates in particular, communications infrastructure build in this region of the world will be critical to the achievement of the forecasts.
Chinese authorities have been trying to make the economy more consumer-led and less reliant on exports, but the continuing fall in imports suggests domestic demand is not as strong as Beijing would like. The ruling Communist Party set a target of 6% trade growth at the start of the year, but total trade for the world’s second largest economy has now fallen by 8% in the first ten months of 2015. Production in China accounts for approximately 65% of the worlds output. However this year we have seen a change with growth being matched by the ASEAN countries, who will certainly take up some of the manufacturing slack from China.
The picture of short term prospects highlighted above is supported by our analysis of the forecasted growth of semiconductors (see Figure 1 above). An indication from the analysis of projected growth, is a slowing in 2016 compared to 2015. Our analysis of the long-term PCBs and Electronics Equipment trends, would confirm that the height of this five year economic cycle will be in 2018 spilling into 2019. This too, is reflected in our latest 5-year forecast which has been delivered to PCB Information Service subscribers at the beginning of December 2015.
This summation and the assumptions described before, have been applied to the demand forecasts for the PCB industry. For 2016, we predict the demand for PCBs to be $65.3 Bn rising to $76.5 Bn in 2019.