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ecsn predicts modest growth for H1 2020

The Electronic Components Supply Network (ecsn) has said that a combination of geopolitical uncertainties and lack of visibility in the market overall have limited its ability to accurately forecast 2020 trends.

Aubrey Dunford, lead market analyst at ecsn, explained the organisation would instead offer predictions for the first six months of 2020. Dunford said uncertainties in various areas mean that “if you talk to three different people, you’ll get three different answers”.

The most likely outcome for H1 2020 will be a period of consolidation and low growth, and ecsn has said its members remain confident that there are opportunities despite the uncertainties. The organisation predicts the UK & Ireland electronics components market will grow in the range of two to three percent in the first half of 2020.

It expects to issue a complete forecast for 2020 in Q2, after which point some uncertainties may have been resolved.

ecsn also reflected on its 2019 forecast. Adam Fletcher, the organisation’s chairman, expressed disappointment that the forecast was not achieved. He explained his view that the ongoing trade war between China and the US has resulted in a significant economic slowdown which has in turn slowed growth in the electronics components market.

Fletcher added that the dramatic reduction in the average lead-time for manufacturing electronic components has had a major impact on the market, explaining that most components have cut lead-times from 18-to-20 to 4-to-6 weeks since mid-2018. He said, “Customers have reduced their in-house inventory and their order cover in-line with the new lead-times, which has had the effect of removing two months billings from the market over the year.”

Dunford reflected on the electronics components market seeing a consistent period of growth starting in 2017 through to the end of 2018, followed by three quarters of negative growth in 2019. Yet the industry, he said, should not be discouraged by this. “It’s not been a good year, and it’s not what we predicted, but historically the industry has been through much tougher times.”

He added that there has been some good news, with distributors sustaining or growing their share of the market. This growth is expected to continue into 2020.

Charlotte Hathway

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