Market Review
ecsn/afdec releases 2019 forecast for UK & Ireland electronic components market
Authorised distributors confident of further growth in 2019
from the association’s member companies the forecast further revealed that the market is likely to have grown by 9.2 per cent in 2018, and distribution's share of the TAM (Total Available Market) in the UK will have grown to about 41 per cent, encouraging the consensus opinion that the recovery in the high-tech
Adam Fletcher T
he forecast for 2019 by the manufacturers’ authorised distributor (afdec) group within the
Electronic Components Supply Network (ecsn) predicts that the UK & Ireland electronic component market will grow in the range 3.4 per cent to 8.5 per cent in 2019, achieving a mid-point of 5.9 per cent. Compiled from individual returns
manufacturing sector of the economy will remain strong and despite the many uncertainties, is likely to outperform the macroeconomic environment. Aubrey Dunford, ecsn Market Analyst commenced his presentation of the association's 2019 forecast by announcing that the UK / Ireland electronic components market results for the current year (2018) will conclude at the higher end of the guidance range provided by the association in December last year. According to Dunford, the market grew strongly throughout 2018 and should show a growth of about nine per cent over 2017 compared to the forecast, which predicted a growth range of 6.5 per cent to 10.5 per cent. He says: “Every quarter of this year saw sales growth when compared to the same quarter in 2017. Growth was not quite as strong as had been expected in the first half of the year but has continued to show stronger than predicted growth in the second half.” The ‘Book to Bill’ ratio remained above unity throughout the first half of 2018 but has softened somewhat in recent months. “The level of billings remained high in the second half, so we must expect that the growth rate will slow a little as we enter 2019, but our members are forecasting a further four quarters of growth at least.”
2019 mid point forecast
ecsn/afdec believes that the outlook for 2019 is positive with growth continuing, although the rate of growth might dip especially in the second quarter, but the association expects growth will pick up again during the second half: “The global electronics market is set on an expansion path with automotive systems and new mobile standards such as 5G leading the way, but these will all need a huge investment in infrastructure which is where UK companies can really make a mark,” Dunford said. ecsn/afdec members remain confident that there are opportunities for further growth in 2019, despite numerous factors that simply cannot be predicted with any certainly, not least Brexit and continuing trade wars, even if at present they seem to be abating. He concluded: “Whatever the final outcome of our Government’s negotiations with the EU we are certain that UK companies will be preparing to participate fully in that growth.”
Continuing growth At the end of 2017 ecsn/afdec reported six quarters of ‘quarter-on-same- quarter-the-previous-year’ growth, which at the time was the longest period of sustained growth seen since 2000. “We’ve now achieved ten quarters of continuous growth and are forecasting that we’ll achieve fifteen quarters of growth by the end of 2019, a performance unseen since we started collecting the data way back in 1984,” Dunford observed. The growth period started in early 2016 but really accelerated during 2017 and has continued in each quarter of 2018. “It is now clear that there are a number of factors behind the upswing, among which the upturn in the global electronics markets predominates,” Dunford continued. “The seed change in electronics markets has enabled more
Aubrey Dunford 22 December 2018/January 2019 Components in Electronics
www.cieonline.co.uk
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