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Why some manufacturers are ordering more computers even with consumer demand weak

Justin Ho Feb 27, 2023
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The transition to remote work for many during the pandemic put more wear and tear on employer-owned computers. Chris Delmas/AFP via Getty Images

Why some manufacturers are ordering more computers even with consumer demand weak

Justin Ho Feb 27, 2023
Heard on:
The transition to remote work for many during the pandemic put more wear and tear on employer-owned computers. Chris Delmas/AFP via Getty Images
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Demand for personal computers has been pretty soft over the last couple of years. Global PC shipments fell over 16% last year, according to the research company Gartner. That’s in large part because a lot of us upgraded our PCs early in the pandemic and consumers now have the devices they need.

But manufacturers ordered more computers and other electronics in January, the Commerce Department reported Monday. In fact, those orders have been rising through much of the pandemic. So what’s driving all that demand?

The kind of equipment we’re talking about isn’t just desktop computers; it’s also electronic components.

“Think about, like, you know, ag equipment — ag equipment is doing really well,” said Tim Fiore with the Institute for Supply Management. “And there’s a whole bunch of electronics on a piece of agricultural equipment.”

There are plenty of other growing industries that need this kind of equipment too: “Component manufacturing, signal processors for automotive, aerospace and defense,” Fiore said.

Another reason some companies are investing in computers and other electronics is that they’re trying to make up for labor shortages, according to David Garfield with the consulting company AlixPartners.

Many businesses are spending more on automation and better software, he said. “All of these things also require heavy-duty infrastructure and investments in hardware.”

And even though consumers have been buying fewer computers, businesses tend to have a faster replacement cycle, per Andrew Hewitt, senior analyst with Forrester.

“Even if, you know, organizations in 2020 went out and refreshed their entire fleet, they’re about getting to that point now where they’re going to be starting to refresh some of those,” he said.

Especially since a lot of people have been using their work computers more during the pandemic, Hewitt added.

“Particularly if people are working at home, eight, nine, 10 hours a day, you know, they’re putting a lot of strain on the PC,” he said. “And it’s actually forced a lot of the decision-makers that I talk to to embrace a faster refresh because devices just aren’t lasting as long.”

And computer supply chains are improving too, Hewitt added — so importing them is getting faster.

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