The latest data from the Manufacturers’ Authorised Distributor (afdec) group within the Electronic Components Supply Network ( ecsn) saw a drop of 14% in the UK market this year, with sales predicted to be flat in 2013. However, the positive book-to-bill ratio gives confidence that the market will pick up later in the year.
The consolidated returns from the association’s membership indicate that the overall UK / Ireland Distributor Total Available Market (DTAM) in 2012 is likely be £1.01bn, with the Total Available Market (TAM) also expected to decline by over (16%) to £2.6bn.
This has been from unexpectedly slow growth across Europe, says Aubrey Dunford, ecsn's Market Analyst. “The year ended (9%) lower than our original forecast but in line with our revised mid-year forecast,” said Dunford. “Returns from our members forecast that the UK / Eire electronic components markets will continue to improve sequentially throughout 2013, with positive growth returning in the second half of the year. We’re likely to see a slight reduction in the TAM, down by 1% to £2.58bn, however the distributor's TAM will remain around the same and therefore a larger share of the total, as customers consolidate their use of manufacturer authorised distributors."
“The Book to Bill became positive in July ‘12 confirming an improving trend in overall demand and suggesting that there is momentum towards a recovery”, said Dunford. “We have been witnessing an extended period of weak demand resulting in a continued inventory correction right across all global electronic components markets. The lead-times for modest volumes of most electronic components is currently less than four weeks with many manufacturers reducing spare production capacity, which will take time to bring back on-line as demand increases”.
ecsn / afdec chairman Adam Fletcher believes the continued inventory correction has been exacerbated by weaker than anticipated global consumer demand, which has significantly reduced electronic components market growth in China from historical norms of 8%