In the following charts, we are presenting the Shipments and New Order data from January 2006 through October 2008 which includes the latest data points available. We also display a trend line derived from a 6th-order polynomial filter. As usual, the focus is on technology. Today we are looking at the summary data for the tech sector, the high-level category of Computer and Electronic Products.
Included in Computer and Electronic Products are the following sub-sectors:
- Electronic computer manufacturing
- Computer storage device manufacturing
- Other computer peripheral equipment manufacturing
- Communications equipment manufacturing, nondefense
- Communications equipment manufacturing, defense
- Audio and video equipment
- Semiconductor and related device manufacturing
- Other electronic component manufacturing
- Search and navigation equipment, nondefense
- Search and navigation equipment, defense
- Electromedical, measuring, and control instrument manufacturing
The chart shows that shipments picked up a bit in October as the electronics industry ramped up for the consumer electronics selling season. The trend line, however, tells another story. Shipments are clearly trending down and the decrease is not insignificant. The gain in October was largely the result of an increase in semiconductor shipments while other sub-sectors languished or declined.
The next chart presents New Orders data. One doesn't even need to see the trendline to realize that New Orders have been falling off a cliff since the middle of 2008.
I am of the opinion that tech will be the sector that provides leadership when this bear market finally comes to an end and the stock market begins its ascent. In the meantime, judging by the latest data as presented in the durable goods report, tech is firmly in the grip of a period of serious weakness. It appears that tech stocks will be wandering in the wilderness for some time to come.