Global Purchasing Index

By Sarah Mangiola, Global Purchasing Staff

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.

Sourcetoday Com Sites Sourcetoday com Files Uploads 2014 04 Index Optimism Tool April

Global Purchasing’s GPI Down in April

Business outlook declines among electronic component buyers, new report shows

Sourcetoday Com Sites Sourcetoday com Files Uploads 2014 04 Gauge April

Business confidence among electronic components buyers fell in April, as Global Purchasing’s Global Purchasing Index decreased 2.2% to a reading of 112.1.

Purchasing managers surveyed for this month’s GPI reported that new orders slowed slightly during the month, inventories and purchases decreased, and prices and lead times increased marginally. New orders fell for the third straight month—down 0.9% compared to March and following a 2.3% drop in February. Inventories declined during the month following an increase from February to March, and purchasing activity fell following a decrease from the previous month. After remaining fairly stable from February to March, lead times lengthened, increasing just over 3% in April. Prices have been consistently on the rise since January, with a 2.8% increase from March to April.

Comments from purchasing professionals surveyed in April indicate a slowing in orders and increased lead times for electronic components, compared to March’s results.

“New business seems to have weakened this past month,” 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.

Some panelists indicated lead times as something to watch, which is reflected in the significant increase from March.

“Obsolescence and lead times are always a concern. While we haven't seen an unmanageable impact to lead times overall, we have seen lead times increase on some components,”another panelist said. “Furthermore, we have noticed some components near their end-of-life phase of the lifecycle more quickly than anticipated.”

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.

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