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Assembly Contracts Quarterly Report
Q4 2018
Celebrating 29 years of excellence
ACL factory May we take this opportunity to wish you a prosperous New Year.

In this report we aim to inform our industry colleagues of any relevant news, component lead-time updates and market conditions that may affect the electronics industry as a whole and particularly, the making of your product.

I hope you find the following informative. Please feel free to get in touch if you have any questions or comments.
ACL News
We can report that were no non-conformities with our Annual ATEX, or our Quarterly CSA & FM external audits.
Component Lead-Time Increases - Severity Continues.
ACL SM LineThe supply situation this quarter continued to be a challenge as stocks deplete and lead times increase. With more and more items being put on order stop, it is more important than ever that orders are placed as far in advance as possible in order to allow stocks to be secured.

Please see the enclosed component lead-time update as well as our website for further comments; Click Here particularly for sizes 0805 and 1206.

Supply Chain & Manufacturing
Supply chain managementUK GBP data missed estimates in the closing of Q3. August came in lower than the expected 0.2pc. Manufacturing expanded at the fastest pace in six months at the end of the quarter. PMI recorded at 54.2* in December, an increase of 0.6 from the previous month. Despite the growth the reading for Q4 was, however, the weakest since Q3 2016, which was immediately after the EU referendum. The average PMI of 2018 was 53.9, significantly lower that the previous years' average of 55.9. The figure still remains significantly higher than those in Europe for a second consecutive month, which averaged at 51.4. The increases linked to Q4 growth are linked to client efforts to build up safety stocks in order to mitigate potential Brexit disruption, something ACL has been encouraging for a few years now and will continue to do so as stock availability continues to be a challenge.

*anything below 50 denotes contraction and above indicates expansion.
UK & Global Trends
ACL SM LineThe start of the quarter began with a boom to GBP as reports circulated that a divorce deal could be struck after differences around the Irish border were supposedly narrowed and Barnier confirmed that 85pc of the deal was agreed. The situation was changed days later, however, after the fallout from the Summit became clear. As an extension was sought GBP traded flat against the Euro and fell against the US Dollar. It gained some ground following the US midterms which had more to do with Dollar weakness that Sterling strength. The rest of the quarter saw volatility as Brexit uncertainty continued.

The BofE leaving rates unchanged had a positive impact on the rally but had little impact as it followed the poor PMI reading.

Italy's public debt was brought to the forefront of EU relations as the European Commission slammed its 2019 budget. The country remains vulnerable and a potential contagion to other EU countries. Angela Merkel's announcement that she is to step down in 2021 as head of state also had a weakening effect on the single currency. The Eurozone also suffered is slowest GDP growth rate since 2013 coming in at 0.2pc lower than the expected 0.4pc.pc.

USD saw its 2018 highs this quarter due to a combination of good data and the failings of other currencies. The midterm elections put weight on the Dollar and results caused it to slip after the Democrats won control of the House of Representatives putting them in a position to obstruct Trumps policies. The Senate, however, remains under Republican control. Trump expressed a willingness to work with the Democrats but did not fail to also threaten them. Overall, the US tax cuts provided additional stimulus for the economy and US ended the year in a prominent position.

China's growth continues to decelerate mainly due to industrial overcapacity.
Please find enclosed ACL's brochure together with a component pricing and lead time breakdown

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.

If you would like to discuss any manufacturing requirements please don't hesitate to get in touch with me.

Arthur Woode
What our clients say about us...
" We think ACL's systems are second to none. Not one of our suppliers - ever, have been able to match up to your traceability etc. "
" I would like to take this opportunity to thank everyone at ACL for all the hard work and support you have provided over the past twelve months. It has been a pleasure dealing with you and long may it continue. "
" Developing our partnership with ACL has enabled us to significantly streamline our business and focus on our core competencies. "
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