European electronics output holds steady

Prospects for growth exist, but the West European electronics industry continues to face global pressures, according to Reed Electronics Research

Electronics output in Western Europe remains significant. According to Reed Electronics Research’s (RER) annual survey, production in the region amounted to €192bn in 2004, around 19 per cent of the global total.

The sharp decline between 2000 and 2003, when electronics output fell by just under 30 per cent, has moderated although with pressure on prices and the increasing need to relocate to reduce costs, overall output has continued to edge downwards. Output in real terms declined by 0.7 per cent in 2004 and was forecast to fall by 1.3 per cent in 2005.

The gradual decline of Europe's manufacturing industry...  ...or poised for growth?

Other findings include:

• The sharp decline in the communications and IT sectors, in particular, has had a significant impact on the industry and most notably in France and the UK, where a combination of lower demand and the migration of production to lower cost locations has seen output fall by 37 per cent and 45 per cent respectively between 2000 and 2004.
• Germany, with its strength in automotive and industrial has not been as badly affected. After falling by 16 per cent in the period to 2002 production has increased in the subsequent two years, albeit only modestly, with overall production still remaining below 2000’s level.
• In spite of its poor performance in recent years Italy continues to be Europe's fourth largest electronics market behind Germany, France and the UK. In 2001, however, it dropped to fifth behind Ireland in terms of overall output - a position it retained in both 2004 and 2005.
• Communications, including both fixed and wireless, accounted for the largest share of electronics output in 2000 and has remained the largest product group although over the period to 2004 its share of the total has fallen from 31 per cent to 28 per cent. In contrast industrial has increased its share of the total from 18 per cent in 2000 to 23 per cent in 2004 and highlights the growing importance of the sector.  Pressure on prices continues to impact all areas of the industry and in particular the component sector.

RER's Yearbook of World Electronics Data 2006 – Volume 1 West Europe provides a strategic assessment of the West European electronics industry. The report is part of a database which has tracked developments in the European and global electronics since 1973 and now provides information on 51 countries.

For further information contact: Anita Caird at Reed Electronics Research, Tel: +44 1235 227310; Email: anita.caird@rer.co.uk

www.rer.co.uk

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