Component distributors in the UK are more confident about business prospects than at any time in the last three months.
A survey of 20 managers in the distribution sector found that two-thirds were more confident of business prospects than three months ago.
A similar number told Electronics Weekly that new order levels were up in the last month.
This is first sign that business confidence may be starting to turn around in the component distribution sector which has been hit very hard by the industry downturn since the third quarter of 2008.
One manager said the up-tick in ordering patterns could be a response to increasing leadtimes on some components.
But the industry is sitting in a very deep through and no one questioned in the survey believed there would be a rapid upturn in the market in the coming months
Two-thirds of managers questioned did not expect sustainable sales growth to return to the business before 2010.
"Most feedback from analysis is that Q309 and or Q409 will see a level of normalisation, however we do not see this in EMEA or the UK at this stage," said one manager.
Half felt the market would not return to growth until the send half of next year.
While some chip suppliers have been forecasting to the inventory correction which started with a vengeance in Q4 2008, the distributors are less certain.
Half of those managers questioned in our survey, which took place at the start of July, said they are still cutting inventory.
"It should be noted that the inventory supplier in the total supply chain is lower than it has been for years, in the suppliers, distributors and customers. If the market springs back into action suddenly, as we have seen in Asia, we will see extending leadtime and allocation," said another executive.
Electronics Weekly will repeat the survey in September.
I think that most electronics and component suppliers and distributors will always have a easier time changing their fortunes in the markets. It's the suppliers and distributors who handle products such as supplies or industrial equipment that will have a harder time with the markets. I work at Janilink http://www.janilink.com/ a U.S supplier of janitorial supplies equipment, floor machines, burnishers, and carpet cleaning supplies, and its not easy being a small business in a now more competitive market. It's not about profits and revenues anymore, its about survival.