AFDEC members sales growing as market stays flat - Embedded.com

AFDEC members sales growing as market stays flat

LONDON — The Association of Franchised Distributors of Electronic Components (AFDEC) is forecasting that the U.K. electronic components market (TAM) available to distributors will decline slightly in 2007 by 0.2 percent to £3.786 billion but the distribution total available market (DTAM) will grow by 2 percent to £ 1.137bilion.

Franchised distributors share of the TAM has grown steadily from 23 percent in 2001 to almost 30 percent in 2006 and looks set to continue in 2007.

AFDEC believes that the U.K. electronic component market has now stabilized post the 2000 'dot com bubble' with the predominant driver being U.K. industrial and Government spending, which is closely aligned with economic conditions in both the U.K. and it’s major export market’s, primarily the Eurozone countries.

One of AFDEC’s key economic assumptions in the Forecast is that EU wide growth will continue in 2007 but at a slightly lower rate than in the previous year, mainly as the result of increased interest rates slowing spending by industry and consumers.

Taking a longer view, AFDEC forecast that the U.K. electronic components DTAM will grow by an additional 2.5 per cent in 2008 but that the TAM will decline by a further 2.6 percent.

“We are seeing a transfer of business from electronic component manufacturers to their Franchised Distributors”, said Adam Fletcher, AFDEC Chairman: “The increased use of lean manufacturing techniques favors franchised distributors who are able to supply a wide range of electronic components from a diverse range of manufacturers and who leverage this advantage in order to meet their customers’ needs for greater flexibility in both the quantity required and shipment window”.

In last year's report AFDEC predicted that the decline in the DTAM in 2005 would be 10.8 percent and the decline in the TAM would be 13.9 percent. The actual figures for 2005 show a decline in the DTAM slightly better than its prediction on 10.0 percent but further research has suggested that the decline in the Total Market was greater than our prediction at 19.2 percent. This decline came as expected from the remaining larger companies moving production and purchasing off-shore. As expected this had a larger effect upon the component manufacturers’ direct business than on the distribution business.

The AFDEC Annual Forecast is in its twenty second year, and is available to non-members for =£475.

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