Market Review
Update on UK connectors I
UK connector sales growth improves in Q3 of 2022 but book-to-bill is flat for the quarter, reports The Interconnect Technology Suppliers Association (ITSA)
TSA members continue to report strong revenues which are reflective of the very high order intake levels in the first half of 2022, however, ytd sales 2022 are now the same as 2021. Bookings fell away in Q3 and ended up at a ratio of 1:1. Despite this drop overall the ytd book to bill is still at 1.14. Most members are still carrying strong order books which should continue positivity in 2022, however, with all the economic and political uncertainty the medium-term outlook remains very challenging. As indicated in the chart 'Connected Sales by Market Sector', most UK markets continue to perform well with Communications, Data Processing, Broadcast, Utilities and Industrial leading the way, all with significant double-digit growth. However, this is somewhat offset by decline in the Mil/Aero and Mass Transport markets. Circular Connectors are driving key technology growth, particularly in harsh environmental applications. Members indicated at the end of Q2 that the levels of business they were seeing was not sustainable and this has been proved right in Q3. Notwithstanding this, 2022 will be an exceptional year for all ITSA members. ITSA held its first face to face meeting for some time on the 24th November 2022 and this gave members a chance to review market and technology trends, discuss common challenges, reflect on the positives and negatives of 2022 and take a look at
the first time in five months. Despite all the challenges UK manufacturers remain generally positive about the next 12 months. S&P Global/CIPS data is used by ITSA to measure comparisons in market trends and once again it independently demonstrates the quality and validity of ITSA’s data and members views of the UK market.
Summary
2022 continues with positive trends in most markets and technologies, as can be seen from the latest statistical data. However, with the economic, political, inflationary and cost-of- living challenges, combined with the impact of the war in Ukraine, the UK market outlook remains very challenging.
Nevertheless, UK connector market suppliers, in facing these significant challenges, remain remarkably resilient and optimistic.
Skills shortages are still a challenge for ITSA members (along with the UK manufacturing sector in general) but members continue to invest in their own people development initiatives.
what may be expected in 2023. This report was produced following that meeting.
S&P Global/CIPS UK Manufacturing PMI
According to S&P Global/CIPS data for Q3 of 2022 the PIM stood at 48.5 which is down on Q2 and is reflective of a general slowdown in
the UK manufacturing sector. This is the third quarter in a row where the PMI was below 50. Manufacturers linked lower production to a continued reduction in new order intake, with the level of new incoming business declining for the fourth month in a row. UK manufacturers faced tougher conditions in both the domestic and export markets with some experiencing delays in orders or cancellations which they report are due to rising economic and political uncertainty, inflationary pressures, and the cost- of-living crisis. Price inflationary pressures remain elevated in the UK and input costs rose on the back of continuing raw material shortages, higher prices for commodities, electronics, energy, oil, plastics among many other items and lead times increased for
www.cieonline.co.uk https://itsa.org.uk/ KEY POINTS:
● Revenues are flat comparing YTD 2022 v YTD 2021.
● Importantly, members revenues are still at +8 per cent over pre-pandemic levels
● Book-to-Bill for the quarter was 1:1 but remains positive YTD at 1.14:1
● 2022 orders are now up 10 per cent year- on-year.
● All members key markets continue to show growth with the notable exceptions of Mass Transport, Medical and Test & Instrumentation, all of which are showing reductions over 2021.
● Distribution remains a major contributor to members growth. It is now 46 per cent above pre pandemic levels, however, recent growth has been slower with +7 per cent YTD 22 v YTD 21 and +9 per cent Q3 v Q2.
● Mil/Aero, a key contributor to members revenues, has shown a drop of 8 per cent over 2021.
Components in Electronics December/January 2023 49
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