News Article
North America July Chip Sales Up But Set To Bomb 20%
Economic research firm e-forecasting.com says that the North American Semiconductor Chip Sales leading indicator rose 0.8 percent in July to a reading of 157.3, after a decline of 0.9 percent in June.
The index was set to average 100 in 2005.
The indicator, comparable to the company's other global regional semiconductor industry indicators for Japan, Asia Pacific and Europe, is a forward-looking composite index that forecasts six months ahead, on average, business activity in the region for sales for semiconductors.
"The July report shows that the North America semiconductor industry leading indicator is possibly rebounding after hitting a lull the last few months " comments Dr. Evangelos Simos, Chief Economist of e-forecasting.com. "Also, in our North America semiconductor industry forecast report, we are calling for a 19.9% decrease in sales in the next 12 months compared with the previous 12 months."
The six-month growth rate is commonly used in business cycle analysis for both signalling impending turning points in business activity and as a recession monitor. The semiconductor leading indicator's six month growth rate was 5.4 percent in July 2012, improving from June's rate of 4.3 percent.
Consecutive positive values in the six-month growth rate predict an end to an economic recession and the beginning of an upcoming expansion. Six of the nine components that make up the leading indicator for semiconductor sales in the Americas market improved in July: Non-US Demand Outlook, 35-Country Leading Index; Interest Rate Spread, US Financial Markets; Change in Profit Margins, US Semiconductors; Ratio of Orders to Inventories, US Electronics; US Housing Market Barometer and Business Activity, US Manufacturers.
The three components that had a negative contribution to the leading indicator for semiconductor sales in the Americas market were: Productivity Barometer, US Manufacturing; Weekly Production Hours, US Semiconductors and Long-Term US Consumer Expectations.
