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Authorised distributors see continued growth in 2018

Adam Fletcher

The UK & Ireland electronic component market is forecast to grow in the range 6.5%-to-10.5% in 2018, according to a new forecast from the Electronic Components Supply Network (ecsn).

The forecast also predicts that the market was thought to have grown by an impressive 17% in 2017, reflecting a strong recovery in the UK’s manufacturing sector, with distribution's share of the TAM (Total Available Market) in the UK thought to have topped 40%.

According to Aubrey Dunford, ecsn Market Analyst, the ‘Book to Bill’ ratio has remained above unity throughout 2017.

“However, in recent months it has softened a little, indicating that the rate of growth will slow as we enter 2018, but,” according to Dunford, “the association is forecasting a further five quarters of growth at least.

“We are seeing a period of sustained ‘quarter-on-quarter’ growth” observed Dunford, “something we haven’t seen since the 1990s, and the growth we’ve experienced over the last six quarters is the longest period of sustained growth since 2000”.

Dunford said that growth is being driven by a number of factors, the most important being the upturn in the global electronics market, the fall in the value of the pound and the expansion of electronic systems into ever more areas of daily life.

“UK companies find themselves in an ideal position to capitalise on the opportunities presented, most of which are within the market sector served by authorised distributors,” Dunford said. “While global growth is causing the lengthening of lead times on some product lines, manufacturers are expanding production, although perhaps with more caution than we have seen in the past.”

ECSN believes that the outlook for 2018 is positive with growth continuing, especially during the first half of the year. That said the association does expect that growth will slow during the second half.

“Our members remain confident that there are opportunities for further growth in 2018, despite numerous factors that simply cannot be predicted with any certainly, not least the impact of Brexit,” Dunford said.

Commenting on the 2018 forecast ECSN chairman Adam Fletcher welcomed the continued recovery in the global economy and after almost a decade in the doldrums he said 2017 was an ‘inflection point’ for the UK electronic components industry.

“We expect the UK electronic components markets will continue to grow over the next few years but at a rate lower than the global average rather than at the top of the growth curve.

“Assuming there are no new major macroeconomic shocks, the recovery cycle in the global electronic components markets will continue, with much stronger consistent growth likely for the rest of this decade" Fletcher concluded.

Author
Neil Tyler

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