Market Review
Optimism for 2017 W
Authorised Distributors see continued modest growth in 2017 and predict stronger consistent growth for the rest of this decade
ith the Brexit referendum and Trump winning the American elections, there were fears for how 2016 would end and how 2017 would shape out. The economy dropped from the moment we voted to leave Europe and it seemed that the UK was going to slip back into recession and be in the worst position it has ever been in. However, on review, it seems that the Brexit effect hasn’t been too damaging. According to the manufacturers’ authorised distributor (afdec) group within the Electronic Components Supply Network (ecsn), the UK and Ireland electronic market is likely to grow by 2.5 per cent in 2017. The forecast released by the association predicts that the market will grow in the range of 0.8 per cent to 4.3 per cent in 2017, achieving a mid- point of 2.5 per cent, confirming members’ opinions that the recovery in the manufacturing sector of the economy will remain gradual and continue strictly in-line with improvements in the macroeconomic environment. Aubrey Dunford, ecsn market analyst,
who presented the review of the current year and prediction for 2017, confirmed that the UK / Ireland electronic components market results for the current year are likely to come out beyond the higher end of the range of guidance provided in December last year. According to Dunford, three calendar quarters of 2016 saw growth in line with the upper point of the afdec guidance but the
uncertainty in the market the devaluation of £Sterling against the US$ and € has seen some increase in prices, which inflates the sales revenue. More importantly, UK based electronic equipment manufacturers are seizing the opportunities created by the more competitive pricing of their goods in export markets.” Nearly one third of Mouser Electronics’
sales are now generated in Europe, and according to Graham Maggs, vice president, marketing EMEA, the company continues to grow at a rate which is outstripping the market in general and all
Aubrey Dunford, ecsn market analyst
market grew particularly strong in the second quarter of the year. “The five per cent growth we saw in Q2 ’16 means that the distribution market in the UK is likely to show around three per cent growth in 2016, against the upper prediction of two per cent we made a year ago,” Dunford explained. The Brexit referendum caused concern for the market but it does not seem as bad as we originally thought. Dunford is upbeat about the effects both pre- and post-Brexit stating that they have both had positive impact on the electronic components market. He said, “Although the result of the referendum has increased
Graham Maggs, vice president, marketing EMEA, Mouser
its competitors. “Averaged across the region, our year-on-year sales are up by over 15 per cent, and customer count is even better – over 19 per cent,” said Maggs. This shows a very healthy level of design activity. Drilling down, Mouser is showing growth figures of nearly 20 per cent in the UK. “There is frenetic activity in the IoT space – Industry 4.0, smart home,
connected car, remote medical diagnostics, etc – but other sectors such lighting, aerospace & defence and automotive are still important and healthy,” he continued. As electronic systems continue to expand into ever more areas driven by the ‘Internet of Things’ (IoT), UK companies find themselves in an ideal position to capitalise on the opportunities presented, most of which are within the market sector served by authorised distributors. ecsn’s afdec members are able to forecast that distribution’s share of the TAM (Total Available Market) in the UK will rise to over 40 per cent in 2017. “Our members remain confident that there are opportunities to see further growth in 2017, despite the uncertainties,” Dunford commented. With that said, there are still many uncertainties for 2017 that cannot be predicted with certainty such as the stance likely to be adopted by the new administration in the USA, the outcome of Brexit negotiations, election in Europe and the continuing slowdown in Asia Pacific markets. However, afdec/ecsn members believe that these issues will not have much of an impact to the UK electronic components market in 2017, especially in the first half of the year.
Joel Munday, engineering & marketing director, Arrow
Billings actual and forecast 2014-2017 20 December 2016/January 2017 Components in Electronics
2017 will see Arrow continue to transform to meet the realities of the market it serves. Joel Munday, engineering and marketing director UK, Ireland, Benelux and Eastern Europe says that the company is benefitting from continued supplier consolidation due to its global reach and comprehensive line card. “It’s too early to judge the impact of Brexit but the UK continues to produce innovative designs through a good mixture of existing and new customers particularly focused in the wireless (IoT) and automotive (power and analogue) areas,” explained Munday. “Our strong engineering base is driving the design of tomorrow’s innovations.” The current year is ending with a ‘Book to Bill’ ratio that remains just above unity. “The continued slowdown, particularly in the Asia Pacific market, combined with
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