The Zacks Manufacturing – Electronics industry seems to be benefiting from higher economic activities, product innovation and growth in the e-commerce business. The industry is expected to continue progressing on strong domestic orders and higher export orders for electronics products.
The growing adoption of advanced manufacturing technologies and processes bodes well for the industry participants. Emerson Electric Co. EMR, Regal Rexnord Corporation RRX, Zurn Water Solutions Corporation ZWS and Franklin Electric Co., Inc. FELE are a few industry participants that might capitalize on the prevalent opportunities. Supply-chain issues, inflation in raw materials and labor issues weigh on the companies.
About the Industry
The Zacks Manufacturing-Electronics industry comprises companies that manufacture electronic products like battery charges, battery accessories, outdoor cabinet enclosures, power transmission products, electrical motion controls and motive power devices. Some industry players also provide water-treatment products, engineered flow components, process equipment and turn-key systems. In addition, the firms offer state-of-the-art customer support and after-market services to the end users. These companies are increasing investments for developing innovative technologies, boosting customer and employee experience as well as supply-chain modernization programs. The manufacturing electronics companies sell products and services in various end markets, including robotics, semiconductor, defense, aerospace, medical equipment and satellite communications.
Trends Shaping the Future of Manufacturing Electronics Industry
Strong Domestic Orders & Export Demand: The industry has been gaining from the consistent rise in manufacturing activities, with strong growth in domestic and international orders for electronic products. The ISM’s manufacturing index registered 58.6% in February, indicating expansion of the U.S. manufacturing activity for the 21st month in a row. Also, the metric came higher than the reading of 57.6% in January. The PMI reading above 50 underlines the expansion of manufacturing activities. In February, new orders registered 61.7%, higher than 57.9% in the previous month. Also, new export orders rose to 57.1% from 53.7% in the previous month. ISM’s measure of production in February was 58.5%, marking growth for the 21st successive month. This highlights the trend of healthy economic activities in the sector as companies are scaling up production with bulk orders. A surge in the e-commerce business, particularly amid the COVID-19 pandemic, has also proved beneficial.
Strength in the Electronics Services Market: The electronics manufacturers have been gaining from higher adoption of the advanced manufacturing technologies and processes by original equipment manufacturers. An increase in the requirement for integrating advanced electronic components into electronic devices has supported the electronics manufacturing services market. Also, few industry players with significant exposure to the booming medical and life science markets are witnessing strength across their businesses owing to robust demand for their products and solutions.
Technological Advancement Benefits: With the gradual development of business models and cutting-edge technologies, several industry players have been banking on digitizing their business operations for a while now. Digitization has been enabling several manufacturers to gain detailed insight into their operational performance, demand cycles, supply-chain issues, and delivery status. This is enabling them to bolster their competitiveness in the market with