August shipments from U.S. electronics factories fell 0.4 percent compared with July, reversing part of the outsize 5.6 percent jump in the previous two months.

All is not lost, however. The trend remains clearly up. August shipments were 7.1 percent above last August and have increased at a 22 percent annual pace in the last three months.Orders slipped 0.1 percent in August following a 6.2 percent rise over June and July.

The August sales pullback matches a similar trend in key electronics end markets. Total durable goods shipments fell back to the June level mostly due to an alternating surge and collapse in the volatile transportation equipment market.

Computer, peripheral and storage product shipments declined 10.5 percent after similar size gains in each of the previous two months. Telecom shipments dropped another 1 percent on top of a 1.4 percent fall in July. August sales were 9 percent below August 2002.

Semiconductor shipments soared 19.4 percent more than erasing the 13 percent drop the previous month. This was 24 percent more than the same month last year and the highest sales total since March 2001.

Technology manufacturers’ inventories remain lean falling 0.3 percent in August while sales fell 0.4 percent. Downstream inventories are also lean with other durable goods manufacturers cutting August inventories 0.4 percent.

Electronic sales are expected to continue to expand although the pace will slow from the rapid summer pace. Stronger growth in U.S. domestic demand will be the main market driver through the winter with contributions by year’s end from the emergence of Taiwan, Korea and much of Europe following their brief recessions earlier this year.

By: DocMemory
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