BANNOCKBURN, IL — New data from IPC show supply chain challenges remain acute, but may have peaked, while lead times remain high. High material and labor costs are expected to continue for at least six months, while recruiting and finding skilled talent continues to be difficult.

Among other conclusions, global electronics manufacturing survey results show nearly nine in 10 electronics manufacturers report material costs are rising, with an additional four-fifths reporting rising labor costs; 13% of the electronics manufacturing supply chain reports inventory is growing, and one in 10 say inventories from their suppliers are growing; ease of recruitment and profit margins are currently declining, along with inventories, especially those available from suppliers; electronics supply chain reports orders, shipments, and capacity utilization are expanding, but weak inventory availability and higher costs for materials and labor hurt profit margins.

The data on future economic outlook suggest growth is decelerating, but good growth is expected in the year ahead, says IPC. After growing 6.1% in 2021, global growth is expected to slow to 4% in 2022 and close to that in 2023.

In North America, growth will fall from 5.4% in 2021 to 3.7% in 2022. In 2023, growth is expected to slow further, anticipated at 2.6%. In Europe, growth is expected to slip this year from 5% to 4% and decline to 2.4% next year. In Asia, growth is expected to fall from 6.7% to 4.8% this year. Five percent growth in Asia is predicted for 2023.

“While growth slows this year, this should not necessarily be interpreted as weak growth,” said Shawn DuBravac, IPC chief economist. “Growth rates in 2022 will generally be higher than they were headed into the pandemic.”

IPC surveyed hundreds of global companies, including company sizes representing the full electronics manufacturing value chain.