Germany hopes distribution market has hit bottom
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The German market for component distribution has hit bottom with no clear sign of the way forward. Geopolitical uncertainties, the US China trade war and tariff battles are leaving electronic equipment makers in Europe’s largest economy nervous.
Sales of electronic components via distribution fell by almost 25% in the first quarter of 2025 compared to the same quarter last year according to trade association FBDi. Order intake provides a slight positive but the outlook remains subdued until the middle of the year with the industry hoping this is the start of the recovery.
However the news is not good. Reporting members of the FBDi recorded sales of €814 million, the lowest first-quarter figure since 2021. Semiconductors suffered the biggest losses once again, falling 30.5% year-on-year to €492 million. Passive, electromechanical and power supply components were more stable, with sales of €283 million for passive components representing a decline of 16.7%. Electromechanical components (-9.6%) and power supply components (-8.5%) dropped less.
“After a challenging 2024, component distribution in Germany had to cope with a further decline in the first quarter of 2025,” said Andreas Falke, managing director of FBDi. “While external factors will determine whether there will be an upturn or stagnation, companies need to prepare strategically. Bottlenecks are not currently expected, even though order intake indicates a revival in demand. However, geopolitical uncertainties mean that protecting critical supply chains is becoming increasingly important, particularly in the electronics industry where success or failure of production depends on availability of single components.”
He points to a ray of hope from new orders, which rose to €799 million in the first quarter of 2025 – a 24.1% increase on the same quarter last year. With a book-to-bill ratio of 0.98, there is hope for a noticeable recovery in the second half of the year, although that is still a decline in the market.
“The economic forecasts for 2025 are the most challenging yet,” said Falke. “Geopolitical tensions, rising tariffs and fragile supply chains are causing uncertainty worldwide. The growing fragmentation of the global economy is having a significant impact on growth, with the global economy expected to expand by just 2% this year. Germany is particularly affected: according to the German Economic Institute, real GDP will fall by 0.2%. US trade policy is causing major disruptions to international trade, limiting global trade in goods to a growth rate of only 1.5% — a development that is having a particularly significant impact on the export-oriented German economy.
“Business and government must take bold steps to anticipate and respond to these massive changes. The companies that will be successful in the future are already redesigning their business models today, focusing on innovation, resilience, and sustainable cooperation. Robust networks with qualified distribution partners and a focus on innovation are therefore key to increasing resilience and proactively shaping the coming changes. The era of purely optimising the price of existing goods is over — now, creative solutions and strategic foresight are needed to ensure long-term success.’
FBDi members include Acal BFi Germany; AL-Elektronik Distribution; alfatec; Arrow Europe; Avnet EMG EMEA; Beck Elektronische Bauelemente; Blume Elektronik Distribution; Bürklin Elektronik; CODICO; Conrad Electronic; DACOM West, Distrelec; Ecomal Europe; Endrich Bauelemente; EVE; Future Electronics Deutschland; Glyn; Gudeco Elektronik; Haug Components Holding; Hy-Line Holding; JIT electronic; Kruse Electronic Components; MB Electronic; MEDI Kabel; Memphis Electronic; Menges Electronic; MEV Elektronik Service; mewa electronic; Mouser Electronics; Neumüller Elektronik; pk components; Püplichhuisen; ROTIMA; RS Components; Rutronik Elektronische Bauelemente; Schukat electronic; SE Spezial-Electronic; SEMITRON W.Röck; TTI Europe; WDI. Supporting members are TDK Europe and Recom.
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