UK distribution sees 5% growth in 2014
The cautiously optimistic forecast by the Manufacturers’ Authorized Distributor (afdec) group within the Electronic Components Supply Network (ecsn) the market will return to growth in the range 3.5%-to-8.2% with a mid-point of 5.8% in 2014, but cautioned that the recovery is likely to be gradual and in-line with improvements in the macroeconomic environment.
“The year ended at the lower end of our guidance, with Authorized Distributors maintaining but not increasing their share of the TAM” said Aubrey Dunford, ecsn analyst. “Returns from our members forecast that the UK / Eire electronic components markets will continue to improve gradually throughout 2014. We believe the UK market will grow 5pc next year but we don’t think we will see the big swings we saw before. The big difference is that we are dealing with a world economy that won’t be picking up."
The Distributor Total Available Market (DTAM) in 2013 is expected to be flat at £1.01bn, with the Total Available Market (TAM) likely to remain flat at £2.7bn.
"Although recovery is patchy and generally slow, there are good signs," said Graham Maggs, Director Marketing EMEA Mouser. "One of the most positive indicators is the growth in our business – we have enjoyed best ever-sales performance this year with EMEA remaining Mouser’s top performing region with better than 28% growth on the back of similar growth last year. Since our primary business is to support development activities we can conclude that design is alive and well in Europe – which must point to better times ahead.”
The improvement in macro-economic conditions in the Eurozone and beyond have contributed to an improvement in both consumer and business confidence, says ecsn / afdec chairman Adam Fletcher. However the improvement in the Construction, Services, Automotive and Aerospace sectors have yet to be realised in the Industrial Market sector, resulting in limited supply network visibility. “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,” said Fletcher “But we will get to the party and contribute having a good time in 2014,” he said.
“The predictions are in line with our expectations," said Ben Green, Technical & Marketing Communications Manager at Harwin. "However, our customers are now seeing healthy orders and the distribution network has responded by increasing their stock profiles to meet this increased demand. We are encouraged by the number of new projects that are starting and the success that we are having with the new products that we launched in the last two years.”
“2013 was a recovery year for the industry and, although most distributors reported flat numbers, Digi-Key saw solid growth in the second half of the year. In 2014, we anticipate to see healthy numbers, industry-wide, on a global scale. We forecast larger order sizes and especially strong growth in Europe and Asia,” said Tony Harris, Digi-Key Chief Marketing Officer.