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Assembly Contracts Quarterly Report
Q2 2019
Celebrating 29 years of excellence
 
ACL factory 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
Our Green campaign is now complete. All our work area lighting is now LED.
Component Lead-Times
ACL SM LineLast quarter saw improvements on the component lead time situation.

The second quarter has been much the same, as predicted, with stock levels even improving in some areas.

Pricing is also starting to stabilise.
Supply Chain & Manufacturing
Supply chain managementThe first quarter showed an improvement in UK manufacturing data but the same cannot be said for the second with PMI recording at 48.0* indicating the sharpest contraction in over six years. Mirroring the rest of the world, employment in the sector also fell as Brexit weighed heavily with experts laying the blame at the door of the unwinding of stockpiles built up in case of a no-deal Brexit. With this in mind it does beg the question of how clearly one can see the true state of the sector. Despite this the survey did reveal almost 44 pc of companies predicted higher output in a years' time and only 14pc expected a decrease so the UK does appear to remain attractive in the long term.

*anything below 50 denotes contraction and above indicates expansion.
UK & Global Trends
ACL SM LineThis quarter saw further reports of a global slowdown.

As Brexit uncertainty continues so too does the falling of Sterling value, new order books and confidence in the UK government.

Reports today show Sterling trading at near six-month lows. Mays resignation increased the likelihood of the UK leaving without a deal as it won't be easy for Parliament to stop the new PM from leaving without a deal. Altogether huge blows to Sterling strength.

The Eurozone's slow growth has continued and is expected to continue. The ECB has indicated it may cut interest rates and restart asset purchases if the situation does not improve. Whilst this is of interest to markets it had little impact on the movement of the single currency. It saw some activity this quarter, mainly as a result of Dollar movements.

Chinas manufacturing sector contracted in June falling to 49.4* from 50.2 this quarter. With US and China trade talks back on track strength was given to the commodity currencies.

The US too is showing signs of being affected by the global slowdown and trade uncertainty with PMI having dropped for a third time to 51.7*. Whilst this still indicates growth it has certainly cooled over in the past year or so. The market is predicting a rate cut this month after factory activity fell for the third month in a row this quarter. Despite the positive non-farm payroll reports the Fed may still cut rates as an insurance policy against the slowing economy.

*anything below 50 denotes contraction and above indicates expansion.
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
Director
What our clients say about us...
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" It really was a pleasure to visit the company, and the audit confirmed that you have implemented a very robust and effective system. "
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