UK electronic manufacturing sector expects ‘rough ride’

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The UK’s electronic manufacturing services (EMS) sector is expecting a rough ride going into Q2 of 2009, according to a survey conducted by trade association Intellect.

Half of those companies were questioned said their confidence in the markets for the next quarter was either ‘diminished considerably (6%)’ or ‘diminished (44%)’. Project or order deferral was cited as the biggest barrier to growth this year. Anecdotal evidence from the respondents suggests that technology start ups are deferring more because of a lack of credit. Henry Parker, Intellect’s technology markets programme manager, pictured, commented: “The UK EMS sector is well set up to ride out the current recession, having already seen out a period between 2000 and 2006 when production of electronics in the UK fell by 50%. Most key players are cash rich and relatively free of debt. However, some of their customers – especially the small ones – are not. They are behaving in an increasingly conservative manner and it is this unpredictable behaviour that is causing worries and lowering future confidence in the markets.” According to Intellect, a split has opened between EMS providers in terms of order book levels by volume. The number reporting above expected levels is up on last year’s survey, but so are those reporting than expected lower levels. Larger companies are reporting increased order levels, perhaps because they have a wider customer base across more markets are not impacted so much by increasingly conservative customer behaviour.