UK distributors warn of allocation

December 03, 2020 // By Nick Flaherty
UK distributors warn of allocation
The latest figures from the Electronic Components Supply Network (ecsn) predict a slow return to growth in a UK distribution market facing allocation and extended lead times.

The forecast covers only the first half of the year as the second half is only the ‘best guidance’. This is due to the lack of customer visibility in the electronic components market coupled with a wide range of “unknown unknowns” and uncertainties created by Brexit, the ongoing Covid-19 Pandemic, US / China trade war and global economic instability, says Adam Fletcher, chairman of ecsn

He also warns of lead times extending to lead times and allocation of orders. "Lead times have gone up 4 to 6 weeks in the last six weeks which is a big leap," he said. This is confirmed by distributors. 

"We began to see small signs that material costs may increase, and lead-times for some components began to lengthen at around the end of October but as we approach the end of the year the dynamics may have changed significantly. We now know that material costs are increasing and that lead-times are very likely to extend by many weeks," said Graham Munson, Vice President EMEA Customer Service at Mouser Electronics

The forecast predicts that the UK & Ireland electronic components market will be flat in the first half of 2021 in the range of -2 percent to +4 percent, with a mid-point decline of 0.5 percent. The second half guidance see growth from flat to 6.5 percent, with a mid-point of 2.7 percent growth on the previous year.

“2019 was a year of correction after two years of exceptional growth in 2017 and 2018”, said Aubrey Dunford, ecsn Market Analyst: “Our members believed that a market upswing would commence in 2020  but what we saw was a sharp market decline primarily as the result of a global economic slowdown caused by the COVID-19 pandemic, which was not a forecastable event in December 2019”

There were already a number of uncertainties emerging in December 2019 which led ecsn to issue only guidance for the second half of the year, but

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