ACL Contract Electronics Manufacture

Innovation . Design . Manufacture

Celebrating 27 years of excellence

Welcome to the Assembly Contracts Quarterly Report

With this report we aim to inform our industry colleagues of any relevant news, component lead-time updates and market conditions that may affect the manufacture of your product, or the electronics industry as a whole.
With ACL, Manchester, as your partner you receive unsurpassed manufacturing quality, delivered on time every time by our IPC trained & experienced workforce.

We now offer a 3-Year workmanship warranty as standard at no extra charge.

Our sophisticated, bespoke, written in-house, purchasing, QA, and production control software is continuously modified in response to market changes.
Prototype
Materials are always purchased and products are manufactured well in advance of delivery dates, giving you peace of mind.

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

ACL News

We have now deployed a new & improved stock control system, which provides better flexibility traceability and speed of kitting.

Supply Chain & Manufacturing

Chinese manufacturing contracted at its fastest pace in almost 3 and half years this quarter. The PMI was reported at 49.4 in January from 49.7 in December. Anything below 50 indicates contraction of a sector and this will be Chinas 6th consecutive one. Despite the 1st quarter always being the weakest in China due to the annual disruption of Chinese New Year there appears to be no indication a recovery is likely.

A great deal of Q1s focus has been on the June referendum and the view with regards to Manufacturing is varied. Whilst some argue manufacturing would suffer if we were to exit others insist it only a short term disruption that will ultimately make little difference.

Being in the EU allows manufacturer’s direct access to the vast market of EU members and being in the EU is an attractive and competitive trait to investors. By exiting the argument is we would lose our competitive edge compared with those still in the EU. Nissan, for example, who are the UKs largest automotive manufacturer has said it would consider leaving the UK if we left the EU. This action, in turn would result in job losses both directly and indirectly through those who supply Nissan.

Pro exit arguments dismiss these comments as unrealistic suggesting a Brexit isn’t reason enough to cease trading in the UK.

If we exit, claims are that import costs would increase and we would see heightened regulation and import duties on our exports. How lengthy or not the negotiations will be are unknown and subject to a debate in themselves. Those wanting to leave the EU focus heavily on the sovereignty argument and call for our country to be governed by our country and not have our laws made elsewhere.

The one area all parties seem to agree is that uncertainty is a given whatever the outcome. We won’t know what staying holds in store, or what impact an exit will have.

UK & Global Trends

We are still in the early stages of debates surrounding the potential Brexit but with only 3 months to go the impacts on the economy and GBP are being seen. Whilst the start of the year GBP was steady, the announcement of the Mayor Boris Johnson in favour of the out campaign saw Sterling plummet as did the resignation of Iain Duncan Smith as fears of political instability heightened. Some ground has been made in the wake of the ECBs cutting of interest rates to record lows but as the Brexit talks wage on Sterling will remain volatile.

Following the devastating terrorist attacks in Brussels 'Brexit' bets increased and following poor manufacturing data for Q1 the pound suffered even steeper losses.

The other standout topic is the ECBs attempts to weaken the Euro in an attempt to make imports more expensive and therefore drive consumer prices higher, worked momentarily until markets noticed that the ECB had nothing left and there would be no further reductions and thus took it as reason to buy the Euro. So in affect the ECBs actions impact were in fact reversed.

An increase in supply and reduction in demand has resulted in a slump in oil prices having varying effects on the USD. GBP made some gains on the Dollar as a result of dovish remarks from the Fed chair Janet Yellen suggest a Fed rate hike is unlikely.

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
Director
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