Pedaling into the home stretch and it's still anybody's guess what the economy will hold in the year ahead.
By most accounts, the first nine months of 2003 contributed to an uneven recovery, as optimism grew slightly with each successive quarter. But it's unclear whether we're building a foundation for long-term growth or a house of cards that will collapse with the next unforeseen shock wave. Just in case, the industry is holding its collective breath.
The good news is that the optimists among us are on the increase. Both revenue and net income at Cypress Semiconductor, for example, exceeded expectations as the company swung a third-quarter profit of $11.1 million. Cypress president and chief executive T.J. Rodgers was not alone among industry leaders in citing tighter supplies and lengthening lead times as signs that 2004 will be a better year.
Since July, EBN has reported stronger orders, slowing price erosion, and shrinking inventories in any number of industry sectors, including flash memory, DRAM, power semiconductors, disk drives, CCDs and CMOS image sensors, and printed-circuit boards. Only telecom appears isolated from the rebound.
At $772 million, LCD glass manufacturer Corning beat the high end of its revenue estimate by $7 million and climbed out of the red with net income of $33 million. Texas Instruments recorded a $447 million profit on third-quarter sales of $2.5 billion as demand for wireless communications and consumer electronics goods remained robust.
And after faltering in September, the EBN Electronics Buyers' Index (EBI) sprang back to 43.5 in October, closing in on August's figure of 44 that was the highest the index has reached since November 2001. (See story page 8.)
Just as promising is the fact that the EBI production index, which sank to a record low of 24.2 in June 2001, jumped to 52.8 in October. Not only does that signal a three-year high, but the index for the second time in three months climbed above 50, which separates industry growth from contraction.
By themselves, these indicators are not enough to point definitively to a sustained business recovery. Will the EBI and other indices continue to climb in the first quarter of the new year, or will that magic 50 mark prove to be a chin-up bar that the industry keeps dipping above and below? Stay tuned.
The heartening thing is that, of the buyers that EBN polled in the last month, not one offered a negative assessment of the industry. The recovery may still be in its infancy, but there is a decidely "glass half full" sentiment among our readers. That attitude speaks volumes and is much more meaningful to the bottom line than anything the corporate spin doctors can concoct.
Keep the faith.
E-mail comments to Andrew MacLellan at email@example.com.