UK Electronic Components Market to Grow 6% in 2014

UK Electronic Components Market to Grow 6% in 2014

Cautiously optimistic outlook from European components group predicts a return to growth next year for distributors in the United Kingdom and Ireland

The market for electronic components in the United Kingdom and Ireland will return to growth next year following flat conditions in 2013, according to the Manufacturers’ Authorised Distributor group of the Electronic Components Supply Network, a European trade group. ECSN released its market outlook report in early December, citing a 2014 growth range of 4% to 8% industry wide, with a mid-point of roughly 6%. The group cautioned that the recovery is likely to be gradual and in line with improvements in the macroeconomic environment.

ECSN market analyst Aubrey Dunford pointed to a weak second half of the year in 2013, as components markets performed below expectations.

“The year ended at the lower end of our guidance, with Authorised Distributors maintaining but not increasing their share of the [total available market]” said Dunford. “Returns from our members forecast that the [UK/Ireland] electronic components markets will continue to improve gradually throughout 2014. We’re likely to see a very slight increase in the [total available market] … however the [distributor total available market] share will remain around the same and for the first time in several years [reflect] growth at a few directly supported customers in automotive markets.”

Dunford also pointed to limited customer visibility and low lead-times as key factors in the recovery.

“Our members’ customer forecasts are limited and as a result they continue to place very short-term order cover, which the generally good availability of components and low lead times enables them to do,” he says. “The lead time for modest volumes of most electronic components is currently less than four weeks, but with many manufacturers reducing their production capacity it will take some time to bring this capacity back online as demand increases.”

ECSN chairman Adam Fletcher points to improving business conditions across the Eurozone, but cautions that the industrial economy lags behind consumer and other markets.

“Unfortunately, the industrial market sector, on which the bulk of the UK and Ireland electronic components market is reliant, tends to lag rather than lead,” Fletcher explains. “But we will get to the party and contribute to having a good time in 2014.”

Global forecasts are predicting moderate market growth in 2014 as well. The World Semiconductor Trade Statistics group, for instance, released an updated semiconductor market outlook in December that calls for 4% market growth in 2013 to $304 billion, driven mainly by double-digit growth in memory products. WSTS predicts similar growth over the next two years, pointing to an anticipated 4% increase in 2014 followed by an expected 3% rise in 2015. WSTS says it expects wireless and automotive markets to grow faster than the total market while consumer and computer categories remain stagnant.

“We are optimistic about moderate growth in the electronic components industry in 2014,” Steve Martin, executive vice president of sales at distributor Components Direct, an Avnet Company, said in a late November interview with Global Purchasing.

“The slow economic recovery globally [is contributing to slow industry growth] along with budget instability in core electronic component sectors such as military and aerospace,” he explained.  “However, the industry is seeing a continued drive for more electronics within certain industries. Lighting, medical equipment as well as consumer electronics such as mobile devices continue to grow, which is boosting sales for many companies.”

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish