DISTRIBUTION It’s Forecasting Time Again!


Forecasting is essential in any well-managed organisation, but has been likened to driving a car at top speed with only the rearview mirror for guidance.


A


n accurate business forecast is a great help when allocating resources such as people, cash, inventory, etcetera. Regularly  forecasted data enables businesses to make essential ‘adjustments’ to their planning in a timely manner. For many years, the UK electronic components supply industry has included aspects of the annual Forecast compiled by the Electronics Components Supply Network (ecsn) within their own forecasting process. In this article, Adam Fletcher, chairman of the association shares a glimpse at how 2024 is likely to conclude for UK and Ireland electronic components markets and provides a personal perspective on what 2025 may hold.


In November each year, ecsn members participate in the preparation of the association’s market forecast for the coming calendar year. This is done through a combination of surveys and numerous individual and group discussions, the  what problems members encountered in the market in the current year and what measures they took to overcame them. The consolidated data is the basis of the association’s review of the current year and perhaps more importantly, its forecast for the industry in the coming year. It is never an easy process. The association has to cope with a very diverse set of returns, not least because the membership is drawn from a wide cross-section of the electronic components industry, but over a period of a few weeks the association’s analysts compile members’ views into a realistic, overall industry market forecast.


We were wrong


I have had a part in the ecsn market forecast process every year since 2005 and am pleased to report that, until recently, the association’s predictions have generally proved to be accurate within a couple of percentage points. For obvious reasons, the market has been highly volatile in recent years, which has skewed the outcomes somewhat. In its forecast for 2024 that ecsn published in December ’23,


the association predicted that electronic component markets would experience an overall sales revenue growth in ’24 in the range 1.6 percent to 4.1 percent with a mid-range estimate of 1.4 percent. The pink line in the graphic shows the ‘actual’ 2024 performance while the broken green, purple and blue lines show the ‘forecast’ range.  that Q4’24 (the pink line) will continue its  the year is likely to end showing negative growth in the range 15 percent to 18 percent compared to 2023. We hold our hands up, our forecast was wrong. The actual 2024 sales revenue growth was very much, but we were not on our own. Electronic components market across Europe have reported similar outcomes to the UK and Germany’s results were particularly dire. Global electronic components markets appear to be faring better; Asia-Pac has reported 12 percent growth compared to last year and India 40 percent, albeit from a low starting point. China claims to have grown 26 percent  be taken with a pinch of salt.


How can your organisation help? In troubled economic times, all organisations need to successfully manage short-term adversity in order to protect the long-term outcome. For that to happen, industry needs accurate and timely forecasting, shared up and down the supply network. Customer organisations across the electronic components supply network need to actively increase their involvement in wider industry collaboration and demand forecasting. It costs very little, but when well-managed, offers all parties great returns for the time and effort invested.


Concluding thoughts


All organisations in our industry need to be extremely careful about how they proceed over the next year. The supply and demand dynamic will change quickly and there will continue to be sporadic shortages of a small, but ever-changing group of  growth curve for the global electronic components supply network over the mid and long-term remains “up and to the right”, even if predicting the level of growth in the short-term is something of a challenge.


NOVEMBER 2024 | ELECTRONICS FOR ENGINEERS 17


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54