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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (10260)	11/2/1997 3:36:00 PM
From: Darin	Read Replies (1) \| Respond to of 70976

To All, New Orders Boost EBN's QUEST Index By Ismini Scouras A blast of new-orders activity in October sent the rate of growth in the electronics industry to a new high for the year, according to EBN's latest Quest index. For the 15th straight month, the Quest composite index climbed above 50, the line that marks growth and contraction in the electronics industry. The index registered 57.8 in October, compared with 56.7 in September. A three-month mean of the index averaged 57.27; it has been rising steadily over the last five months, reflecting the vigor in the electronics market. Industry watchers pointed to strength in the PC market, with the increasing popularity of the sub-$1,500 PC driving double-digit growth rates. Worldwide PC unit shipments are expected to grow between 15% and 20% this year, according to Vladi Catto, chief economist at Texas Instruments Inc., Dallas. "Other segments are actually stronger than computers," Catto said, citing healthy cell phone sales in the United States and abroad. Demand for networking equipment is also strong, he added. The Quest production index dropped one point to 59.5 in October from 60.5 in September. Meanwhile, the new-orders index soared to its highest reading in more than two years, climbing to 60.8 from 57.6 last month. The last new- orders high was in March 1995, when the index measured 61.6. "If there's an end-of-year push for the holidays, then you'll see the bulk of that strength reflected in September and October," said Tad LaFountain, an analyst at Dominick & Dominick, New York. "There's certainly no obvious areas of shortage anywhere in the chain, which says that end demand is probably going to be as good as it can get." La Fountain added that he sees no reason for OEMs or distributors to build inventory. The inventories index, which has been hovering around 50 for at least a year, climbed to 50.7 in October, compared with 47.4 in September. Semiconductor raw-material inventories at the level of electronic equipment manufacturers are at 2.2 weeks, according to Catto. "October represents a record low for inventories," he said, adding that inventory levels in July were 2.4 weeks. In July 1996, OEMs were carrying 4 weeks of inventory. In 1987, the inventory level was 10 weeks. "OEMs are very careful in controlling their inventories," Catto said. U.S. manufacturers predict that continued consumer demand and low interest rates will keep production, new orders, and employment levels healthy through December, according to Dun & Bradstreet Corp.'s September survey of 1,000 manufacturing executives.