I previously identified three reasons why the upturn in the distribution market, when it comes later this year, will be faster than in the recovery to previous downturns.
Now there is a fourth.
First, excess inventory has been washed out of the supply chain more efficiently than in the last downturn in 2001/2.
Second, there are fewer distributors operating in the market compared to the situation eight years ago.
Third, the Internet has changed the component distribution market in the last five years.
I have found a fourth reason.
The German economic looks like it is coming out of recession far faster than anyone thought possible just three months ago.
After almost a year in recession the German economy grew by 0.3% between April and June.
The French also added to the positive feel with a similar Q2 growth figure.
The German numbers are particularly encouraging for the supply chain.
We already know that German exports rose by a surprising 7% in June.
This was the largest single month rise since 2006 and is really positive news for the European electronics sector which is heavily dependent on the health of the German manufacturing base.
Crucially new orders from the industrial sector in
May be its time to start watching the pound-euro exchange rate more closely again?
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