AFDEC sees slowdown in growth - Embedded.com

AFDEC sees slowdown in growth

LONDON — Figures collected by the Association of Franchised Distributors of Electronic Components (AFDEC) for May show a significant improvement in 'bookings' and 'billings' growth compared to the same month last year.

However, the level of growth is lower than in April which suggests that the overall rate of growth may be slowing.

According to AFDEC chairman, Adam Fletcher, the Association will need to analyse the next couple of month’s data, as the sector moves into the generally quieter summer period, to see if this is a sustaining trend. “We believe our annual forecast for 2006 remains on track but we will continue to keep it under review in the light of the statistical evidence.”

The overall Book-to-Bill ratio in May increased slightly to 1.09:1. Overall Stock Turn ratios remained static at 2.5 times, with overall Inventory levels increasing by 1%. Debtor Days increased by 5 days to a total of 68.4 days.

“The book-to-bill ratio remains positive, which is good news”, concluded Fletcher. “It’s interesting to note that there has been a significant increase in Debtor Days, which is normal within the cycle, but we need to monitor this very carefully.”

Total average daily bookings (net sales orders entered) in May declined by 4.8% when compared to April but increased by 29% when compared to the same period last year. Sector specific bookings changes compared to April 2006 saw semiconductor decline by 9.1%, passives decline by 3.8%, electromechanicals increase by 6.9%, component assemblies declined by 8.1% and other products declined by 17.1%.

Total average daily billings (net sales invoiced less credits) in May declined by 6.3%, when compared to April but increased by 10.7% when compared to the same period last year.

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