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© wizzyfx dreamstime.com Electronics Production | January 16, 2013

Connector industry to get 2013 sales to grow +4.2%

"We are forecasting 2013 sales to grow +4.2%. This projection for moderate growth is in line with GDP growth projections by the IMF for the various regions of the world", writes analyst firm Bishop & Associates.
There are some headwinds facing the industry in 2013.

The economic malaise in Europe is still prevailing. The austerity budgets in Europe to fix the deficit spending have generally slowed several economies and thrown others into a shallow recession. Although the European Union is working together to sort through the issues, it is uncertain how long it will take to re-establish healthy economic growth in the region.

Although modest GDP growth has been achieved in the United States for the last 11 quarters, it has not been sufficient to bring total unemployment down to pre-recession numbers and consumer confidence has been wavering. If federal budget reductions and tax reform plans drag out through the year, the economic growth will be impacted adversely.
China’s GDP growth has been slowing for the last 10 quarters from 11.9% YOY to 7.4% YOY in 3Q12. Additional problems in Europe or the United States would reduce their growth further.

China’s growth in their internal markets has been fueled by rising wages and easily available credit. The Chinese consumers may have taken on to much credit which could lead to reduced consumption if the cost of credit increases or the source of income is lost.

Continued unrest in the Middle East could destabilize worldwide financial markets and economies.

The Bottom Line

Industry sales growth in the range of +4.2% is a likely result for 2013. Some sales growth is almost certain given the easy comparison to 2012 and the relative stability (for good or bad) of the current economic/political status of the world. For the same reasons, growth significantly above this level is unlikely as the events needed to drive the higher growth would already need to have begun unfolding to significantly impact the year.

The only opportunity for a significant downside is the unforeseen event, either manmade or from nature, that could substantially disrupt the worldwide economy.
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The full report can be found at Bishop & Associates.

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