Orders to fall
Staff -- Purchasing, 12/9/2004 2:00:00 AM
Electronics business picked up early in the fourth quarter, but, compared to October, fewer buyers said they would increase their purchase orders over the next 90 days.
Almost half of the electronic buyers, a healthy 49%, reported that business picked up in November over October and another 36% said it was the same. However, PURCHASING Magazine's monthly electronics business survey found that just 51% expected purchase orders to increase over the next 90 days. That's down from 61% in October.
One reason purchases may be weakening is a slowdown in corporate computer buying. Only 17% of companies increased orders for computers in November, and nearly three-fifths, or 57%, said computer orders were flat.
Buyers add that there is little chance of semiconductor price increases over the next 90 days. But price tags won't fall either. Seventy-two percent expect them to remain the same over the next 90 days, up from 48% in October.
An increased number of buyers also plan to maintain inventory levels. A hefty 41% reported in October that they would reduce stockpile levels; but in November that percentage fell to 24%. Thirty-eight percent said parts availability was tight in November, up from 25% in October. But the tightness will be short lived, as there is ample capacity to meet demand and additional semiconductor capacity is coming on line.
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