Analysis and comment on all matters pertaining to the supply chain and distribution of electronics components from Richard Wilson, editor of Electronics Weekly.
Market is in recovery mode as Q1 surprises suppliers
The downturn in the UK component distribution market in the first quarter of the year was not as deep many feared.
Only a few months ago some were suggestiong a possible market decline of 15%.
Adam Fletcher, head of supply chain body ECSN, now says the reality is looking no where near this gloomy.
“The outcome of Q1’12 in the UK / Eire is not yet known but anecdotal evidence suggests that it was better than the forecast (9.5%) decline and suggests that Q4’11 may have been the low point in the cycle,” said Fletcher.
According to Fletcher, the decline in billings in the electronic components market started in May last year with the semiconductor and passive components sectors primarily affected.
“Then the perceived wisdom was that Q1’12 would be the market low point and a slow recovery would then follow,” said Fletcher.
But the market decline of 10% in Q4 was deeper than expected and now the market may be in early stages of recovery.
“The UK / Eire and European electronic component markets have historically always shown stronger growth in the first half of the year but we are operating in uncertain times and historical trends may not be a reliable guide,” said Fletcher.
Lead times are good and short mainly because China is no longer Hoovering up supply.
“Unfortunately manufacturers of electronic components have also reduced their output and if demand in Asia ramps up quickly this situation may change with lead times rapidly extending,” warned Fletcher.