The ecsn has delivered a cautiously optimistic forecast for 2014 based on a report released by the Manufacturers’ Authorised Distributor (afdec) group within the Electronic Components Supply Network (ecsn). It it believes that the market will return to growth in the range 3.5 percent-to-8.2 percent with a mid-point of 5.8 percent in 2014, but cautioned that the recovery is likely to be gradual and in-line with improvements in the macroeconomic environment.
The organisation advises that, analysis of the consolidated returns from its membership indicate that the overall UK / Ireland Distributor Total Available Market (DTAM) in 2013 is likely to have remained “flat” (no growth or decline) when compared to the previous year. In 2013 DTAM is expected to be around £1.01bn, with the Total Available Market (TAM) likely to remain flat at £XXbn. “
Presenting the forecast, Aubrey Dunford, ecsn Market Analyst confirmed that in 2013 the UK/Ireland electronic components markets performed within the range of guidance in the association’s forecast, but that growth in the second half of the year and into the final quarter remained below expectations: The year ended at the lower end of our guidance, with Authorised Distributors maintaining but not increasing their share of the TAM” said Dunford.
“Returns from our members forecast that the UK/Eire electronic components markets will continue to improve gradually throughout 2014. We’re likely to see a very slight increase in the TAM (up by XX percent to £YYbn), however the DTAM share will remain around the same and for the first time in several years reflecting growth at a few directly supported customers in automotive markets”.
Dunford confirmed that the ‘Book to Bill ratio’ an important industry indicator, whilst being generally positive has not consistently been above 1.1:1 a ‘magic number’ that heralds a return to stronger long term growth: “Our members customers forecasts are limited and as a result they continue to place very short term order cover, which the generally good availability of components and low lead-times enables them to do,” Dunford said, “The lead-times for modest volumes of most electronic components is currently less than four weeks but with many manufacturers reducing their production capacity it will take some time to bring this capacity back on-line as demand increases”.
According to ecsn/afdec Chairman, Adam Fletcher the well-publicised improvement in macro-economic conditions in the Eurozone and beyond have contributed to an improvement in both consumer and business confidence. However the improvement in the Construction, Services, Automotive and Aerospace sectors have yet to be realised in the Industrial Market sector, resulting in limited supply network visibility.
“Unfortunately the Industrial market sector on which the bulk of the UK and Ireland electronic components market is reliant, tends to lag rather than lead,” said Fletcher “But we will get to the party and contribute having a good time in 2014,” he concluded.
Ben Green, Technical & Marketing Communications Manager at Harwin adds: “The predictions are in line with our expectations. However, our customers are now seeing healthy orders and the distribution network has responded by increasing their stock profiles to meet this increased demand. We are encouraged by the number of new projects that are starting and the success that we are having with the new products that we launched in the last two years, such as our hi-rel 1.25mmm pitch Gecko connector family and EZ-Boardware SMT PCB boardware components.”
“2013 was a mixed year overall – many customer projects started but with lower volumes than promised. However, this is contrasted by the many exciting technologies and products, such as the Siretta designed and manufactured Smart cellular terminals that have created new markets during 2013 and will generate growth in 2014.
“At Sequoia we continue to invest in design of new products for all divisions in anticipation of solid growth through 2014 for newer markets.” Nick Lidington, Managing Director, Sequoia Technology Group.
Graham Maggs, Director Marketing EMEA Mouser added: “Although recovery is patchy and generally slow, there are good signs. One of the most positive indicators is the growth in our business – we have enjoyed best ever-sales performance this year with EMEA remaining Mouser’s top performing region with better than 28 percent growth on the back of similar growth last year. Since our primary business is to support development activities we can conclude that design is alive and well in Europe – which must point to better times ahead.”
“Within this overall market there are currently some sectors growing faster than others. Avnet MEMEC aims to help customers grow into these markets utilising the vast knowledge of our Business Development Managers to help them identify the right solutions for their current and future projects, increasing company efficiency and significantly reducing their time to market. Concentrating on growing markets that we understand well helps our customers to grow and creates the opportunity for us to outgrow the overall market,” said Chris Shipway, Country Director, Avnet MEMEC UK
Tony Harris, Digi-Key Chief Marketing Officer said, “2013 was a recovery year for the industry and, although most distributors reported flat numbers, Digi-Key saw solid growth in the second half of the year. In 2014, we anticipate to see healthy numbers, industry-wide, on a global scale. We forecast larger order sizes and especially strong growth in Europe and Asia.”
ecsn/afdec chairman Adam Fletcher notes that the recovery from the current recession is unprecedented in recent times: “The previous recessions in the electronics industry have been either regional or sectorial, this is the first global event, if ‘global economies all rise on a tide of economic recovery’ it will have a profound impact on availability in the global electronic components supply network as manufacturers scramble to keep up with demand.” Fletcher concluded.