Global Electronics Sector Faces Rising Costs Amid Strong Demand, Talent Shortages

The Global Electronics Association’s July 2025 Sentiment of the Global Electronics Manufacturing Supply Chain Report indicates ongoing cost pressures in the global electronics manufacturing supply chain. According to the report, 61% of firms reported higher material costs, and 54% noted increased labor expenses. The Material Cost Index saw a slight decline from June, and profit margins improved by 6 points, though only 15% of manufacturers reported actual profit gains.

Operational metrics, including orders, shipments, backlogs, and capacity utilization, reflect continued expansion following a rebound that began in late 2024. Over the next six months, manufacturers anticipate persistent high material and labor costs, with recruitment challenges expected to continue.

Shawn DuBravac, Ph.D., the association’s chief economist and report author, stated that strong demand indicators, such as orders and shipments, persist, but rising costs are straining the sector. He noted that while operational momentum continues, margin recovery remains limited.

The report also highlights workforce challenges, with 60% of firms actively hiring, particularly European companies seeking talent for critical roles. Globally, 63% of manufacturers cited talent shortages as a cons...