APAC Chip Sales Indicator Down 1.3% in June

The Asia Pacific Semiconductor Chip Sales leading indicator decreased 1.3 percent in June to a reading of 373.3, after going down 1.5 percent in May, according to economic research firm e-forecasting.com. The index was set to average 100 in 2000.

The indicator, comparable to the company’s other global regional semiconductor industry indicators for North America, Japan and Europe, is a forward-looking composite index that forecasts six months ahead, on average, business activity in the region for semiconductor sales. The six-month growth rate is commonly used in business cycle analysis for both signaling impending turning points in business activity and as a recession monitor.

The semiconductor leading indicator’s six month growth rate was 4.2 percent in June 2011, after recording a six month growth rate of 7.1 percent in May. Consecutive positive values in the six-month growth rate predict an end to an economic recession and the beginning of an upcoming expansion.

“The Asia-Pacific semiconductor industry leading indicator is rapidly declining. There has been three months of decline in the month over month readings and the six month growth rate is one fourth of what it was just three months ago," noted Maria Simos, CEO of e-forecasting.com.

Four of the six components that make up the leading indicator for semiconductor sales in the Asia Pacific market improved in June: Asia Pacific Demand Prospects, 10-Country Leading Index; New Orders for Computers & Electronics, US Manufacturers; Monetary Conditions, US Yield Curve; North America Demand Outlook and NAFTA Composite Leading Index. The two components that had a negative contribution were: EU (Germany, UK & France) Demand Outlook, Composite Leading Index and Japanese Demand Outlook, Leading Diffusion Index.

e-forecasting.com