After a November/December plunge U.S. electronic equipment orders recovered part way in January (Chart 1). Communications equipment was the culprit for both the plunge and hero for the rebound. Using electronic equipment orders as a "health" gauge may be a bit misleading. Chart 2 shows both electronic equipment orders (green bar) and shipments (black line). Note that shipments continued to grow when orders plunged in November & December suggesting the June to October order run up was a bit over exuberant (double & inventory building?) and the November & December drops were just a correction. In January equipment orders and shipments were "in sync" with a book/bill close to 1.0. Also notice that January electronic equipment shipments (revenues) were at a 3-year high. We're back to late 2000 equipment sales! Rigid PCB orders & shipments (Chart 3) were clearly much improved in the second half of 2003. January was also good month but some domestic PCB makers reported some slowing in late February/early March. My guess is that PCB orders were "ahead" of equipment orders (Chart 4) and that PCBs are now having a mild correction. Fortunately inventories remain low (Chart 5) so any slowing should be temporary. Here's to a good 2004!
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