Quarantine lockdowns due to COVID-19 brought many aspects of manufacturing to a screeching halt. The inability to work in close proximity to one another resulted in over 53% of electronics industry projects being delayed or canceled.
As the world slowly begins to open up again, both manufacturing and engineers themselves are starting to contribute to a recovering market. Moreover, some data suggests that habits will change in both working and purchasing decisions.
Multiple Insights Point to Recovery and a New Normal
Our internal data at Supplyframe shows an increase in buying activity, specifically in regions like Germany, Italy, France, and the U.S. Over the last six weeks, we have seen an engineering activity increase that suggests a potential ramp-up in manufacturing within the near future.
Meanwhile, China and Asia as a whole have been showcasing improved activity since lifting restrictions. In the U.S., we are seeing a return to pre-pandemic levels of engineering work. April of 2020, for example, saw a 2020 year-to-date peak in this metric.
While these results are encouraging, it will mostly like take another 4-6 weeks before we see substantial improvements. During this time, we will also see how delayed and canceled projects factor into new projections.
As part of our data, we also noted a change in purchasing behavior during the week. It is typical to see drop-offs in activity over the course of weekends, but surprisingly we saw consistent activity.
It’s possible that these changes in activity could signal a new normal where purchasing happens consistently throughout any given week. This shift towards a more agile form of engineering or sourcing could be one of the few silver linings of the COVID-19 pandemic.
Taiwanese Sales Data For April 2020 Supports Our Findings
While many companies wait until the close of a business quarter to report business updates, a regulation in Taiwan requires them to report monthly. As a result, it’s possible to see real data from Taiwanese chip, component, and product manufacturers.
While this is only one month of data, it does seem to support the theory that the industry as a whole is moving into recovery. Multiple companies that reported a decline in prior months broke even or showed positive increases in revenue for April 2020.
Here are some of the key takeaways from this data:
- Computers and peripherals, specifically server manufacturers, saw the largest rebound
- Electronics parts and components manufacturers turned small declines into noticeable growth
- Optoelectronics like displays and camera modules continued to show a decline
These findings support predictions from Foxconn earlier in May, which claimed that consumer devices revenue would fall, while enterprise product revenue would climb.
Turning Data into Decisions
One thing that can be certain within all of this is the assurance that post-pandemic manufacturing will look at lot different than it has in the past. The need to transform digitally has long been a valid argument, but in the wake of this unprecedented challenge, it has become a mandate.
As the electronics manufacturing industry continues to recover, it’s important to transform your new product introduction (NPI) processes and future-proof them for the challenges ahead.
Download our whitepaper on NPI to learn more.