Confidence returning to electronic component distribution sector

Predicting that demand is likely to increase by 5.2% compared to 2013, the organisation counsels that the recovery is likely to be gradual. However, it does offer an 'upside' of 7% sales growth. With business in 2013 almost concluded, ECSN predicts revenues from distribution sales will amount to £1.01billion; the same level of sales as seen in 2012. Total sales of electronic components in the UK are expected to reach £2.63bn. ECSN chairman Adam Fletcher, pictured, said an improvement in the European economy has brought greater confidence to businesses and consumers alike. "Unfortunately, the industrial sector on which the bulk of the UK's electronic components market is reliant tends to lag, rather than lead. But we will 'get to the party' and contribute to having a good time in 2014." At the end of 2012, ECSN had predicted the first half of 2013 would see a 4% decline in sales, but that a recovery would take place and sales would end up 'flat' with 2012. Aubrey Dunsford, ECSN's market analyst, noted: "In fact, the first half of 2013 went really well and we thought we should be more optimistic. However, that growth didn't continue." One of the pointers which Dunsford uses is the book to bill ratio – an indication of whether orders are increasing or decreasing. In Dunsford's opinion, the book to bill ratio of 1.1 is a 'magic number' that heralds a return to stronger growth. Currently, the average for UK distribution across a range of technologies is about 1.05:1. Dunsford believes the ratio will 'continue to grow slowly' through 2014. Counterfeiting continues to impact the electronic component distribution market. According to Fletcher, there are two main types of counterfeiting: "Professional, which is mainly affecting Asia, and more amateur attempts, which are mainly affecting the military market as they look to take advantage of specific needs." He said that, whilst a lot of effort is being made to redress the balance, these efforts are not succeeding. This, he continued, is resulting in a change of focus. "One of the things which is being considered is making the possession of counterfeit components illegal; that will put the onus on the buyer and make them criminally liable. If this happens, buyers will have to prove they have done everything in their power to avoid purchasing counterfeit parts."