The current sentiment of the global electronics manufacturing supply chain
31 Jul 2025
News
In its latest report, the Global Electronics Association provides an analysis of the current sentiment and conditions in the global electronics manufacturing supply chain as of June 2025, highlighting cost pressures, demand resilience, and regional differences.
Current challenges in electronics
Manufacturing
Electronics manufacturers are facing significant cost pressures and declining profitability due to rising material and labour costs. Despite these challenges, demand remains resilient, with key indicators showing expansion.
• 63% of manufacturers report rising material costs.
• 48% are experiencing increasing labour costs.
• The Material Costs Index is above its long-term average, but below the 2022 peak.
• Profit margins are declining, with 10% of manufacturers reporting a decrease.
• Recruitment challenges persist, with 13% finding it easier to recruit skilled talent.
Demand resilience amid economic volatility
Demand for electronics has rebounded strongly since late 2024, with several key indicators showing positive growth. This suggests a stable operational environment despite ongoing cost pressures. Orders, backlogs, capacity utilisation, and shipments are all in expansion territory with manufacturers expecting stability in both orders and backlogs through year-end.
Six-month outlook for electronics industry
Manufacturers anticipate that high material and labour costs will persist, but demand is expected to remain stable. This outlook emphasizes the need for cost control and operational agility.
• 66% expect material costs to rise in the next six months.
• 54% anticipate labour costs will also remain high.
• 48% expect orders to remain stable, while 42% foresee stable shipments.
• Profit margins are expected to decline for 45% of global manufacturers.
Although regional variations exist, European manufacturers report a more stable outlook, with 62% expecting orders to remain unchanged.
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