Falling confidence in the economy is starting to impact the electronics supply chain in the UK.
Component distribution representative body Afdec has reported that figures from its members in September indicated a reluctance by customers to place long-term orders for new components.
According to Afdec chairman, Adam Fletcher, there is now concern about the impact a global recession have on distribution customers.
“The negative book-to-bill ratio in our September figures reflects the reluctance by customers to place longer term scheduled orders, as a result order backlogs are slowly eroding,” said Fletcher.
“However,” added Fletcher, “beyond the current short-term customer ordering practice and negative sentiment there is as yet no hard evidence of a significant slow down in UK industrial markets.”
The decline in commodity prices such as oil prices and the fall in the value of sterling compared to the dollar should be seen as positive for UK exporters.
“However currency fluctuations, especially the combination of a strong euro and dollar in the face of a weakening pound is challenging for our members,” said Fletcher.
The September figures showed a decline in bookings of 4.7% and a decline of 9.7% for billings compared to the same month last year.
“These figures need to be qualified because September ’07 was an unusually strong month,” said Fletcher. “Compared to the previous month (August) bookings increased by 4.8% and billings increased 2.2% in September”.
Compared to August ’08 total distributor inventory declined slightly by 0.7% in September while the book-to-bill improved slightly to 0.97:1.