U.S. electronics and computer factories boosted their output 1.1 percent in November versus October, and 18.3 percent from last October, according to the Federal Reserve Board. The monthly gain was double the 0.5 percent recorded in each of the previous two months but short of the 1.4 percent average monthly gain over the past year.

The output of computer, peripherals and storage devices increased 1.4 percent, the same gain recorded in October as well as the average monthly rise over the last year. Telecom output rose an unusually strong 1.5 percent, more than double the average increase in the last 12 months.

Semiconductor and components production increased 0.9 percent following a 0.3 percent fall in October. Unlike other products, the semiconductor production index is based both on the count of parts produced and the added capability of each part. Production increased in other electronics components end markets at a slightly above-average pace overall, although motor vehicle production fell 0.5 percent after several months of reduced consumer marketing incentives.

Component production is still being restrained -- although less so than a few months ago -- by surplus inventories throughout the supply chain. Production is likely to remain below end user consumption into the early winter.

The misreading of end user consumption demand earlier this year is a warning that components manufacturers could overshoot demand again when systems assemblers slow the growth in production schedules at the top of the business cycles. That could happen as early as next year.

By: DocMemory
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