Vote of confidence for UK manufacturing
Electronics manufacturers in the UK are well placed to survive the current euro-crisis and any resulting downturn, writes Steve Rawlins, CEO of Anglia Components
UK manufacturing is cautiously toughing out the downturn. Despite its length and the severity, we’ve seen few of our manufacturing customers going out of business – in sharp contrast to 2008 for example.
I believe that there are around 3,500 electronics manufacturing companies here in the UK and that this is a stable number. That is quite a lot of companies manufacturing quite a lot of things.
There is a lot of design activity going on and our design logs are busier than ever. As a result we are doubling the size of our field applications engineering team to support this activity.
We are making this investment at this point because we believe in investing in our customers, and know that design support at this point in the cycle will generate demand when the economy turns up.
The businesses we are working with tend to be small and privately owned with 20-100 people, manufacturing, and sometimes designing, under contract to a larger company rather than marketing their own products. These smaller contract electronics manufacturers (CEMs) have always been our lifeblood, and the flexibility they need is built into our approach to the market.
They value, for example, a UK warehouse offering guaranteed overland shipments for next day delivery, to save the need to find room to hold stock on-site.
These entrepreneurial companies are flexible and fast moving, responding quickly to capture spikes in demand, and cutting back again to avoid unnecessary costs at times of low demand.
We are currently in a period of low demand, with customers buying to fulfil orders and not to replenish inventory. This is reflected in the March sales figures published by the component distribution industry body Afdec, which were 19% down on the same period last year.
However, as demand returns, the flexible market that we see today will rise equally quickly. Our recent appointment by Analog Devices as a locally-based demand creation distributor is a huge vote of confidence by a global semiconductor company in the UK market.
I believe that the UK manufacturing sector is stronger than ever – and has certainly proved more resilient than in 2008. The underlying UK market is as robust and stable as its ever been. Roll on the good times.