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© luchschen dreamstime.com Analysis | October 14, 2013

Hopeful signs for UK distribution market

ECSN’s AFDEC members hopeful that a continued market recovery will lead to growth into 2014
The Electronic Components Supply Network’s (ecsns) authorised distributor group (afdec) has released its consolidated UK distribution statistics for August ’13. According to chairman Adam Fletcher, although the market turned down slightly in August members are seeing some signals that suggest an improvement in customer sentiment, justifying a continuing positivity in their outlook for the UK and Ireland electronic components market: “Our members’ best collective estimate is that the market will continue its recovery and grow slowly into next year,” Fletcher said, but he cautions “this has yet to be backed up by growth in the longer-term order book.”

According to Fletcher component manufacturers have reduced their manufacturing capacity sharply, leading to availability of some components now moving out from ex-stock to 4 to 6 weeks: “This increase in lead-time is likely to become the overall trend as inventory in the channel is sold,” Fletcher said. “Although demand in China for the Christmas consumer goods market remains sluggish and below expectations - which should impact positively on global inventory availability into the fourth quarter - our domestic market outlook into Q4 ‘13 remains at best opaque.”

The association’s latest UK & Ireland distribution statistics show that Monthly Billings (Net Sales Invoiced less Credits) in August 2013 declined by (7%) compared to the previous month and by (6%) when compared to the same period 2012. The important Book to Bill ratio metric remained in positive territory with the polynomial trend indicating a slight reduction while maintaining a positive trend into the fourth quarter:”

“Although the Sales by Month “three month moving average” for all electronic components does not suggest growth in the immediate future I’m hopeful that it will maintain the historical trend, which is a slight improvement following the peak holiday period,” Fletcher concluded.

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