AFDEC sees improvement in 2010 - Embedded.com

AFDEC sees improvement in 2010

LONDON — The UK's Association of Franchised Distributors of Electronic Components (AFDEC) is predicting that the overall electronic component market growth will be in the range of 2 to 2.5 percent in 2010.

The organization, part of the Electronic Components Supply Network (ESCN), has released its annual forecast and reported that as expected the adverse market conditions persisted into the first half of 2009 and the UK & Ireland distributor Market declined by a further 15.3 percent far worse than expected based upon the views in November 2008.

By the middle of the year, AFDEC saw some more positive signs in the world economy especially as the Chinese market returned to growth. In the second half of the year the rate of decline has slowed and we now expect that the decline for the full year will be in the order of 13 percent.

AFDEC reports that although the growth in the Chinese economy is fuelling a strong upturn in the demand for electronic components globally it does not see signs of a corresponding rise in demand in the US, Europe or UK. The markets are improving but the underlying demand remains weak and much of the improvement in the UK/Eire book to bill ratio is probably the result of global demand extending manufacturing lead times and creating sporadic supply shortages. As a result, it has concluded that the last two months of 2009 and the first half of 2010 will see a slow recovery with growth returning to the market in Q2 2010 and its also expects that the DTAM will increase in the range of 3 to 5 percent in 2010. With improving global business and less availability the distribution share will recover in 2010 and thus it expects that the overall market growth will be in the range of 2 to 2.5 percent.

The development of the markets since 1999, encompassing both the TAM and the DTAM, is illustrated graphically below.

To see a bigger version of this graphic click here.

“The global electronics market is recovering but the rate of growth in the main geographic markets and between distributors with different business models is not consistent,” said Adam Fletcher, AFDEC/ECSN's chairman

For 2009, the total market available to distributors (DTAM) in the UK will decline by 13.1 percent from £1050 million to £912 million. For 2010, the DTAM will be down in the first half of the year between 1.1 percent to 3.4 percent and ECSN’s current expectation is that there will be a further upturn in the second half of the year to bring the decline for the total year into the range of 2.1 percent to 6.9 percent. This means that ECSN’s expectation is for the distribution market in 2010 tobe between £930 million and £975 million.

ECSN’s mid-range expectation for the total year by product group is shown below.

The DTAM by product category is:

To see a bigger version of this graphic click here.

The full UK & Ireland Components Market Forecast for 2010 is available from ECSN/AFDEC – contact enquiries@ecsn-uk.org.

Related links and articles:

AFDEC restricts sales forecast to six months

Distributors’ association sees end to declines

New U.K. association to cover whole supply chain

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