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Electronics Production |

Western European electronics industry: tough year ahead but optimism remains

The European and global electronics industry, which started 2008 facing slower economic growth and high energy and commodity prices, ended the year clouded in even more uncertainty.

According to market research company Electronics.ca publications, the actual extent of the deterioration in the market in the final months of the year has had a marked impact on the outlook for 2008/2009, with companies across the industry lowering revenue and profit projections. With clearly limited visibility the prospects of a recovery in the second half of 2009 are now fading. Consumer and business confidence remains weak and the escalation in the global financial crisis is putting severe constraints on the needed credit to fund expansion and growth. As the global nature of the downturn intensifies demand in key export markets is also weakening and putting further pressure on revenues and margins, said Electronics.ca publications. As a result and based on the annual survey of the West European industry electronics output in Western Europe is forecast to decline by 12% in 2009 to Euro 154 billion, down from Euro 175 billion in 2008 and Euro 273 billion only nine years earlier at the height of the telecom/Internet boom. Between 2000 and the end of 2009 electronics output in Western Europe is forecast to fall by 44%, with all countries in the region experiencing significant downturns. France, Spain and the UK, with their strong telecom and IT bias are expected to see production fall by 51%, 48% and 63%, respectively in local currency. Germany had until the latest downturn been able to withstand the sharp decline due to the countries dominant position in automotive and industrial products although output is forecast to show double-digit declines in 2009. Despite the current outlook the long-term future for the electronics industry in Western Europe remains positive. As we emerge from the current downturn only a few volume manufacturing plants will remain with companies focused on higher margin products in key sectors such as medical, industrial, aerospace & defence, energy, high-end communications and computing. Automotive, as it recovers from the almost unprecedented decline in vehicle production, will once again be a key sector as vehicle manufacturers look to electronics to meet the ever increasing demand for greener and safer vehicles. According to Electronics.ca publications the OEMs in these sectors will continue to look at reducing costs, whether through outsourcing or locating to lower cost locations, but despite this it is envisaged that electronics production in Western Europe will start to stabilize in the 2011/2012 timeframe and provide opportunities across the supply chain.

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March 28 2024 10:16 am V22.4.20-1
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