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Assembly Contracts Quarterly Report
Q1 2020
Celebrating 29 years of excellence
 
ACL factoryIn 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.

May we take this opportunity to wish everyone in your Company and your families well during these challenging times.

ACL is open for business, operating at fully capacity, and as a critical key supplier to the medical & infrastructure industries, will be remaining so.

We are taking every precaution and are following guidelines to protect all of our employees.

Whilst at this time material availability is still favourable, lead-times are extending and pricing is generally increasing. So, should you have any visibility of requirements, even if not for immediate delivery, we would urge you to place your orders as soon as possible.

I hope you find the following informative.

Please feel free to get in touch if you have any questions or comments.


Supply Chain & Manufacturing
Supply chain managementQ1 has been marred entirely by the Covid-19 pandemic. The impact is widespread and the electronics sector is no exception.

We always expect, at the start of the first quarter longer lead-times as a result of the delays caused by Chinese New Year but with Covid-19 came the extension of the factory closures beyond the norm.

China is yet to return to full capacity and there are also further supply chain disruptions due to the more recent lockdowns in other key component manufacturing countries, such as Thailand and Malaysia.

Freight capacity is limited and shipping rates are increasing by a huge amount. Some air freight companies have increased their prices in excess of 100pc.

The Pound has weakened against the Dollar over this quarter.

The result is price rises and lead-times lengthening.
UK & Global Trends
ACL SM LineSterling has had a tough quarter but it hasn't been alone. Initially weakened by Brexit fears over trade, at the start of March, the BofE cut interest rates to 0.1pc and the borrowing rate to 0.25pc. This is the lowest level in history. In an attempt to combat the expected economic slowdown caused by the Coronavirus the QE programme was also kickstarted. GBP briefly fell against USD to levels that have not been seen in 35 years. It also fell against the EUR to levels not seen in a decade. Sterling has made recoveries since, mainly on the back of the UK not suffering quite as much as Spain and Italy. The US jobs data posted disappointingly which also had a positive impact.

The volatility is something rarely seen with markets moving mainly on coronavirus sentiment and glimmers of hope. Recent comments by the IES on the UKs labour market mirrors the situation in the states. They report that unemployment has already risen from 3.9 to 7.5pc of the workforce. The impacts this report may or may not have on the daily situation remains to be seen.

Driven by a weakened/ever changing dollar along with higher demand for electronics and medical devices, Gold has increased in price at an average rate of 12pc in the past 3 months.

The UKs PMI* posted at 47.8** for Q1 which, despite being an improvement on the previous quarter, still shows contraction.

*a measure of manufacturing sectors order book
**Anything below 50 denotes contraction and above denotes 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...
" It really was a pleasure to visit the company, and the audit confirmed that you have implemented a very robust and effective system "
" Tank you all very much for all the hard work you have put into enabling us to order these boards again. I greatly appreciate it. "
" I remain so wonderfully impressed by the solid working relationship that has developed between our companies and how nicely proactive and responsive you all are for us. "
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