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Assembly Contracts Quarterly Report
Q3 2017
Celebrating 27 years of excellence
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 offer a 3-Year workmanship warranty as standard.
ACL factory exterior
Our sophisticated, bespoke, written in-house, purchasing, QA, and production control software is continuously modified in response to market changes.

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.

Material Lead-Time Increases - Now serious.

As I have been reporting in previous Quarterly Reports, it is of great concern to us that lead-times for materials continue to increase.
Some parts are now on 36 weeks+ and many are being put on allocation, resulting in even longer lead-times with no guarantee of delivery.

We, sadly, do not anticipate the situation improving over the coming months and are seeing stocks at distributors fast running out. Going forward, any stocks that are available will inevitable increase in price.

We would encourage all our customers to consider buffering a lot more finished product stocks than perhaps you have done in the past, and place manufacturing orders now.

Supply Chain & Manufacturing

Manufacturing PMI took a hit this quarter, a reportedly direct impact of the depreciation of Sterling. Whilst this was expected to benefit manufacturers by increasing competitiveness the cost of imported materials has also risen, sitting a six-month high last month negating the gain made by the weak Pound. PMI fell to 55.9 from 56.7 (revised) last quarter, indicating softer growth* in the sector.

Along with increased materials imports, capacity constraints added to the costs paid by factories, which shot up at the fastest pace since March.
ACL factory
US factory activity reached a 13-year high in September as new orders increased.

Eurozone factory orders hit a 6-year high in September with PMI increasing to 58.1. This was the fastest expansion since 2011 and helped increase demand for the single currency.

*anything below 50 denotes contraction and above indicates expansion.
ACL Lead Assembly

UK & Global Trends

Quarter 3 has done nothing to strengthen Sterling which again felt the familiar force of negative Brexit news. The comments of Boris Johnson undermining the PM added to the political uncertainty and encouraged those already doubting the UK's ability to make a success of Brexit. May's talk of a 'creative' Brexit without allowing for any details weighed on the Pound as did Moody's downgrade of Britain's credit rating from to Aa2.
EUR saw some losses as Germany's election showed increased support for a far-right party. Merkel did however hold onto office for a fourth term albeit with the party's worst result since 1949.

USD remained resilient in the face of the hurricane disasters buoyed by an impending rate hike by the Fed and the economy's growth recording higher than expected.
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
0161 947 8000
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