No doom and gloom here
There may still be worries about the state of the global economy, but business confidence in the electronics supply chain seems to be avoiding doom and gloom proportions.
At the start of April, Electronics Weekly asked a group of executives in the component distribution what level of business confidence they were seeing in the market.
Almost 70% of those surveyed said they were more confident about business prospects than they were three months ago.
As many as 40% of those questioned said that new order levels were higher than they were at the start of the year.
Whilst the evidence seems to be that the first three months of the year have not been as slow as some observers were predicting at the end of last year. Any confidence that there will be some growth in the market seems to be extremely fragile.
One semiconductor distributor had this warning: “Whilst there is a lot of design activity, orders are slow to start on new product build and existing build volumes are down.”
The result is the first six months of the year are proving to be a period of uncertainty for suppliers and distributors.
“The global economic uncertainty more so than the euro-crisis on its own is having the biggest impact on business confidence,” the head of one component distributor told Electronics Weekly last week.
Whilst another distribution managing director was more upbeat about business prospects for the first half of the year. “Our order book has recovered 25% nearly now at last year’s levels,” he said.
There are now tentative signs that business confidence in the UK supply chain is turning the corner and may even be starting to improve.
The one note of caution is that the effects of the global economic uncertainty may not have yet fully played out.
As one distributor cautioned: “There continues to be mergers, acquisitions and consolidations in the industry due to the global uncertainty for sure. This could have an impact on the supply chain later in 2012.”