Market Review Billings actual and forecast 2016-2019


competitive pricing of manufactured goods in export markets now that the use of electronic systems has finally come into economic use enabled by the IoT and inexpensive WiFi connections, which together are transforming control systems the world over.” According to Dunford 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. He acknowledges that this global growth has also caused lead times to extend on some product lines, especially in the more commodity product areas, which does threaten to limit some of the growth in the first half of 2019, but manufacturers are beginning to expand production. “It is clear that customers who work in close co-operation with authorised distributors are able to meet their production requirements even although overall availability is becoming restricted,” Dunford said.


Commenting on the 2019 forecast ecsn / afdec chairman Adam Fletcher welcomed the continued growth in the global economy and the likely consistent growth in the global electronic components market, which he believes will surge as 5G is rolled out. “The trajectory for the electronic components markets continues to be up and to the right and underlying growth has become the new normal but growth will probably not be linear and we must anticipate the odd bump along the way,” Fletcher said. “I’ve been predicting that the growth curve will adopt a hockey-stick shape towards the end of 2019 and into 2020, causing


keep up with the increased demand.” He believes that growth in the UK, Europe and US will lag behind China and Asia- Pac economies who will be the primary beneficiaries of the 5G roll out and the increased demand for handsets. “I’m confident that UK electronic components markets will continue to grow over the next few years but at a rate lower than the global average rather than at the top of the growth. That said, I fear that we may to be negatively impacted by long lead-times and shortages of some components,” Fletcher added. Fletcher believes that merger and acquisition activity in the electronic components markets will slow in 2019 but that this will be replaced by increased activity in collaboration, cross-licensing, joint ventures that accelerate market access and strategic investment in order to secure capacity or access to technology. “Manufacturers are desperately filling the gaps in their product portfolios to address the emerging technology needs in high growth markets, including 5G infrastructure, industry 4.0 and automotive, but they continue to be


Distributor share of TAM by product group 2009-2019


further supply network problems as components manufacturers scramble to


conservative in adding manufacturing capacity to meet demand in these new markets,” Fletcher concluded. Ismosys managing director Nigel Watts believes that 2019 will be all about Brexit for the UK: “Will we, won’t we? Uncertainty reigns.” Putting Brexit to one side he fears that the industry may have an uncertain Q1 based on continuing MLCC extended lead times and the tariff threat, although that has subsided somewhat recently. That said, Watts agrees that the underlying trend is up and he expects 2H ‘19 to be strong, recovering any reversals in 1H. He says: “Overall result will be flat to plus 2.5 per cent but Brexit can and probably will change everything.” According to managing director Peter


Hannon HARTING UK saw continued good positive growth in 2018, which he says was underpinned by projects and new investment in product ranges. He says: “We enter 2019 with a record order book, however we see early signs of softening in the general UK market. Brexit uncertainties will be another factor in determining how 2019 will actually turnout.”


www.ecsn-uk.org www.cieonline.co.uk Components in Electronics December 2018/January 2019 23


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