ACL - celebrating 23 years of Electronics, Design and Manufacturing
Welcome to the ACL quarterly report

With this, we aim to inform our industry colleagues of any relevant news, component lead-time updates or market conditions that may affect the manufacture of your product, or the electronics industry in general.
With ACL as your partner, you receive quality manufacturing of your products, delivered on time every time. We work hard behind the scenes to ensure there are no component supply issues.
ACL Factory Image All our clients benefit from the highest quality production standards from our IPC trained and experienced workforce. This is something we pride ourselves on and continue to maintain. With accounts with hundreds of suppliers worldwide we are able to source components, where others may struggle. Our sophisticated bespoke in-house written purchasing, QA, and production control software is continuously modified in response to market changes. Materials are always purchased well in advance of a client's delivery date giving you peace of mind.

I hope you find the contents informative. Please feel free to get in touch if you have any questions or comments.

Supply Chain & Manufacturing

Component costs and lead-times have been relatively stable this quarter despite the continual increase in raw material pricing. We would however expect this to change in 2013. This quarter the UK economic situation is positive with the British Chamber of Commerce suggesting a growth of 0.5pc. Government figures show manufacturing output is up 3.2pc in the last month. Although the lowest recorded number of exports to the 17 nation eurozone since 1988 the shift to growing markets in Asia and Latin America has helped shrink the UK's trade deficit with the rest of the world from £4.3billion in June to £1.5billion in July. This is the largest shrinking on record and hopes indicate that Britain may finally be coming out of the recession. The Bank of England has held base rate once again at 0.5pc. Further to our previous report, China is still suffering from the effects of an economic slowdown. This is the 5th consecutive monthly drop in industrial profits, the largest this year. Electronics industry profits declined 2.9pc. The Purchasing Managers Index also showed contraction of manufacturing by 0.2. In addition to continuing increases in labour costs, recent changes to Chinese tax law have served to reduce the incentive of foreign investors. Product quality continues to suffer. Chinese export restrictions on rare earth materials is becoming an increasingly contentious issue as they are seen to be giving China an unfair competitive advantage and The EU has for a second time called for a review based on the restrictions violation of international trade rules. China produces 97pc of the world's share. Whilst costly to mine elsewhere in some countries, mines have been re-opened. This will undoubtedly feed through to higher component prices. China's situation is mirrored in Japan, although on a much larger long-term scale. Since the wake of the slump in 1998, long hours, low pay and the constant threat of dismissal, has lead to a significant increase in cases of ill health amongst the workforce. Impacted by slowing Chinese demand, the eurozone crisis and natural disasters and most recently the 17th typhoon this year, factory output in Japan declined 1.3pc in August from July. Tokyo and Beijing continue to argue over ownership of the East China Sea leading to anti-Japan rallies across China which forced major Japanese companies to close for a number of days.

Currency & Interest Rates

Reports last quarter were of weakening strength of Sterling against the Dollar. The picture this quarter is much more positive with GBP making impressive monthly gains to reach a 4-month high of 1.6255 this month with predictions of a 5-month high should the UK economy continue in its current state. The situation in Europe has meant that sterling has continued to make gains on the Euro reaching a 3 and a half year high in July. August brought initial calls for a boost to the exchange rate but with reports of an increase in UK inflation came further gains to be made on the Euro towards the end. This month's reports have indicated a 0.6% contraction of the Eurozone's economy in Q3 which will further provide a boost for the GBP-EUR exchange. Mervyn King cites the continuing uncertainty in Europe as a hamper to further growth in the UK.
I hope you find this report informative. Please find enclosed ACL's brochure together with a component pricing and lead time breakdown.
If you would like to discuss any manufacturing requirements please don't hesitate to get in touch with me.
Arthur Woode
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