Over the course of 2022 ECSN members, who had predicted strong Billings growth in the range 8%-to-12%, now believe that the outcome is likely to be 18% growth, driven primarily by customers’ concerns about components availability. In addition, geopolitical tensions resulting from the Russian invasion of Ukraine, additional sanctions imposed in the ongoing US/China trade war and international and domestic logistics delays have all encouraged customers to maintain their increase in-house inventory and order backlogs.
Despite these challenges, ESCN is predicting continued growth in the distributor total addressable market (DTAM) over the next two years with component market sales of £1.7bn in 2022 rising to £1.75bn in 2023. Sales will be driven by strong demand for semiconductors.
Growth in the first half of 2023 is predicted to be 3.5-6% but is then expected to slow in the second half of the year, dropping back to under 3%.
Infrastructure improvements, edge computing and the 5G roll-out, are all seen as boosting demand in the UK, compensating for lower consumer confidence that is likely to restrict spending.
However, as ECSN chairman Adam Fletcher warned, changing market conditions and the geopolitical situation could see these market forecasts revised.