A monthly benchmark that gauges purchasing professionals’ views on procurement activity in the electronic components marketplace. A reading below 100 indicates pessimism; a reading above 100 indicates optimism.
GPI Flat in May
Purchasing index remains in positive territory, holding steady at the 112 mark
After declining in March and April, Global Purchasing’s Global Purchasing Index held steady in May, registering 111.9—a slight .14% decline compared to April. The GPI has remained above the 100-point mark indicating optimism since its launch in January this year. Purchasing professionals surveyed this month reported a decline in new orders and in electronic component pricing, and noted that lead times for components shortened slightly during the month. They reported higher inventory levels and an increase in their purchasing activity. The highest growth was in purchasing activity, with the panel reporting a 9% increase compared to April.
“It’s a go. I feel there is currently a push to get lots of projects completed in the ‘now’ time frame” said one panelist.
“Continued demand in the global smartphone market is affecting the semiconductor supply chain. Lead times are stretching for some devices requiring more backlog visibility to be provided and limited flexibility to support new demand for some devices,” another panelist said.
Others noted that current conditions are “like a caterpillar of traffic. Stop and go.”
The panel reported a 4% decline in new orders for the month and about a 4% decline in the prices they are paying for electronic components. They said lead times shrunk by about 3% compared to April, and they reported slightly higher inventories compared to April—up 2%.
Despite remaining in positive territory, the GPI hit its lowest level in May. The Index reached a high mark of 115.9 in February.
Global Purchasing’s GPI measures purchasing professionals’ business confidence in five areas: new orders from customers; electronic component inventory levels; purchasing activity; pricing; and lead times. Global Purchasing compiles the GPI data monthly from a survey of more than 100 panel members who buy a wide range of electronic components. Prequalified for their industry experience, panel members are purchasing executives, managers, or buyers at original equipment manufacturing (OEM) or contract manufacturing firms around the world.
Statements of fact and or opinions expressed in MarketEYE by its contributors are the responsibility of the authors alone and do not imply an opinion of the officers or the representatives of TTI, Inc.
Victoria Kickham is the distribution editor for Electronic Design magazine, SourceESB and GlobalPurchasing.com, where she covers issues related to the electronics supply chain. Victoria started out as a general assignment reporter for several Boston-area newspapers before joining Industrial Distribution magazine, where she spent 14 years covering industrial markets. She served as ID’s managing editor from 2000 to 2010. Victoria has a bachelor’s degree in English from the University of New Hampshire and a master’s degree in English from Northeastern University.