ACL Contract Electronics Manufacture

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ACL Quarterly Report

With this report, 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, Manchester, as your partner you receive unsurpassed manufacturing quality, delivered on time every time by our IPC trained, experienced workforce.

NEWS: Over the last few months ACL have installed a new, third SM line & up-graded our other 2 lines with the latest state of the art equipment.
I hope you find the following informative. Please feel free to get in touch if you have any questions or comments.

Supply Chain & Manufacturing

Towards the end of last year pricing and lead times were increasingly stable. The same conditions are apparent for this first quarter of 2014. The DRAM market in particular has stabilised. The only issues appear to be with low voltage mosfets and rectifiers where availability is tight.

According to the EEF one in six companies has brought manufacturing back to Britain in the last three years. The need to be closer to customers, to have greater control over quality and the corrosion of low labour costs are amongst signs that this trend is to continue. The EEF has reported that for around 40pc of companies which had re-shored production, turnover increased as a direct result. UK manufacturing PMI was lower than expected at the start of the year but was balanced out by the job creation and new orders data. Within the last month the manufacturing has printed optimistically at 56.9 as demand for British goods remained strong, both domestically and abroad. The manufacturing sector also benefitted from its best month of job creation since May 2011 and the EEF is predicting further growth in manufacturing of 2.7pc this year.

The 2014 budget was said to be aimed at bolstering exports, investment, regional development and skills, especially within the manufacturing sector. With emphasis placed on the expansion of the manufacturing sector at the heart of rebalancing the economy, tax-breaks and lending were amongst the measures to enhance. The EEF reported that the high cost of energy was a concern for those companies considering "re-shoring" their production, so the breaks for businesses with regards to this in the latest budget could help ease concern and encourage further business to return to the UK.

UK & Global Trends

To kick-start the year the theme was the Dollar weakness and Sterling strength. 2013 ended with the US tapering back less than expected on the monthly easing cycle reducing the appeal of the USD. Coupled with weak employment data over the holidays the USD had a less than positive start to the year.

In contrast sterling remained buoyant following positive data releases including unemployment figures 0.2pc less than expected setting it closer to the 7pc BofE target. The news that the UK economy grew at its fastest rate since 2007 last year also provided a boost as did the BofE's decision to upgrade GDP forecast from 2.8pc to 3.4pc.

The EU employment data helped boost the Euro as did business performance data. It still remains generally weaker against the pound, but is keeping afloat with the announcement by the ECB to leave its monetary policy unchanged.

China's manufacturing base is still in slowdown this quarter. The currency remains ever volatile and the risk it poses to investors is growing. This month sees the 5th month of contraction with the PMI falling to 48.1 (anything above 50 indicates growth). The process of "re-shoring" back to the UK was most common in China and offers some explanation as to the reduction in manufacturing.

One can hope that the falling inflation rate continues along with the trend of "re-shoring" to make a brighter future for UK manufacturing and the economy as a whole.

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
© ACL 2014