UK is a ‘powerhouse for electronic system design’ says ECSN and AFDEC
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Following the upswing of 2010, the components market will return to modest levels in 2011, with an overall growth of around 4.3%, according to the annual Electronic Components Supply Network (ECSN) and Association of Franchised Distributors of Electronic Components (AFDEC) forecasts.
The trade associations today unveiled this year's UK and Eire – Electronics Components Market 2011 forecast which suggests that the UK and Ireland components market will see supply chain being restocked and, as availability continues to improve, growth will continue at more normal levels. However, it adds that the second half of 2011 will be extremely difficult for companies to forecast.
Worldwide demand is expected to remain strong, resulting in the UK remaining at more normal levels of growth in the second half of 2011. Growth measured against the strong quarters of 2010 may go slightly negative in the last quarter of 2011 says the report.
ECSN market analyst, Aubrey Dunford, observed that overall market growth is being driven by electronics continuing to 'invade' more applications and market sectors. "Markets such as information display, security, and data transmission will help push this growth," he said. "It really is a great opportunity for UK companies to get involved in innovative solutions."
The forecast notes that high availability and low prices may have transferred some business back to manufacturers in 2009, while product shortages in 2010 may have prevented distributors who had not invested in stock from regaining a share in the market. Nevertheless Dunford expects that the current requirement for inventory and longer credit terms are likely to allow distribution to regain a share of the market in 2011 - continuing a trend of recent years.
"Weakness of the Pound against the Euro and the Dollar will continue to be a double edged sword," Dunford continued. "Whilst promoting exports, this will continue to inflate prices of components to UK manufacturers. Some companies are avoiding this by shipping products, selling and invoicing outside of the UK and trading in Dollars and Euros."
The overall forecast describes the UK as a 'powerhouse for electronic system design' but warns that this position needs action to protect it. "However," concluded Dunford, "distributors who work closely with design houses will be able to benefit through 'exporting' components into the growing markets around the world. And that's good for the industry."
