Global PMI

Although the semiconductor chip and capital equipment markets performed well in the first half of 2020, many of the electronic equipment end markets struggled globally. World electronic equipment sales declined almost 10% in 2Q’20 vs. 2Q’19.

2020 still looks to be a very difficult year. How we manage the pandemic, the global economy and international relations remain major challenges but there are glimmers of light near-term and a likely much brighter future in 2021 and 2022.

Included in this outlook is a discussion of the financial impact of the current pandemic and a forecast for GDP growth by major region for 2020 and 2021.

Plunging stock prices and Coronavirus-driven business shutdowns presently dominate the news. Current economic data, including the recently released February Global Purchasing Manager Index, support earlier negative predictions of an imminent industry decline.

Data through December showed a steady recovery in the global electronic supply chain with SEMI equipment leading the way, but in late January COVID-19 began to make its negative impact felt, snarling supply chains and shutting down factories near Wuhan, China.

We are now in the recovery phase of the current business cycle with SEMI equipment already in a growth mode. However significant economic and geopolitical concerns persist.

Global business conditions remain uncertain but the electronic sectors appear poised for growth in late 2019 or early 2020. Normal seasonality will fuel short-term sales increases through late autumn but real growth is still a ways off.

The semiconductor industry felt more of a fourth-quarter slowdown than the end markets.  Semiconductor-related products are typically much more volatile than the electronic equipment markets they serve.