How would you describe current business conditions in your industry?
At best cautiously optimistic, which may not sound hugely positive, but with the recession not too far behind us the industry is still a long way from being confident that there are clear signs of sustainable growth. There is superficial evidence of a return of a healthy market demonstrated by some increases in lead times, but this could change rapidly in the current economic and political climate.
What are your greatest concerns about the electronic components market?
Aside from unpredictable lead times and possible price instability, which are perennial issues, I think the apparent trend towards gradual consolidation of the large global and regional franchised distributors is a significant concern. The options for the electronics buyer are becoming more limited and my fear is that we could find ourselves operating in an oligopoly rather than a broad and competitive market.
What are some of the supply chain issues that “keep you up at night?”
Whilst the electronic component market has long been hostage to the demand and supply fluctuations in the business cycle, I think the current sensitivity of the market is a particular concern. Living with uncertainty is becoming the norm and whilst we may occasionally be kept up at night worrying about tomorrow, I think there is sufficient resilience and creativity within supply chains to deal with changing macro-economic conditions.
Do you think the overall economy is improving? Why or why not?
Certainly with a number of countries that were most affected by the recent recession, such as the UK and US, recent economic indicators such as GDP growth and falling unemployment would suggest overall improvement. But some countries within the Eurozone have recently announced deflation and are in real danger of a return to recession, which should be a reminder that even with interdependent markets some may progress whilst others stagnate. My overall view is that the economy is improving, albeit tentatively but with concerns over the political situations in the Middle East and the Ukraine we should be wary of false dawns. Maybe the last five years has taught us to be resilient and less reactive to adversity; ‘riding the storm’ may become the norm.
How would you assess your business confidence over the next month?
Even though the market is still sensitive and we know never to be complacent, business confidence is high as current conditions within our market are reasonably buoyant and customers are making longer term commitments. This bodes well for the future.
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