European distribution sees signs of improvement - Embedded.com

European distribution sees signs of improvement

LONDON — The European electronic components distribution market is returning to growth according to the latest figures from the International Distribution of Electronics Association (IDEA).

The European electronic components distributor total available market (DTAM) in the third quarter of 2009 shows a book-to-bill ratio improving to 1.08:1.

Total European distribution bookings (net sales orders entered) in the third quater of 2009 increased by 16 percent when compared to the previous quarter but declined by (10 percent) when compared to the same period 2008.

Sector specific bookings changes in the third quarter 2009 compared to the same period last year saw semiconductors decline by 7 percent; passives down 16 percent; whilst electro-mechs and other components declined by 16 percent.

Total European distribution billings (net sales invoiced less credits) in the third quater of 2009 improved by 3 percent, when compared to the previous quarter but declined by 20 percent compared to the same period 2008.

Sector specific billings changes in the third quarter 2009 compared to the same period last year saw semiconductors decline by 21 percent; passives decline by 21 percent; electro-mechs and other components declined by 16 percent.

The figures are better than the association’s previous guidance but in-line with the financial results for many sectors of the global electronic components market according to Adam Fletcher, IDEA Vice President,

“Whilst this improvement in the sequential results for both bookings and billings is great news, it is coming from an historically low base and still represents a significant decline when compared to the same period in the previous year,” said Fletcher. “The re-stabilisation of our industry and economy over the second half of the year is to be welcomed but despite the optimistic industry forecasts I suspect that we will continue to ‘bounce along the bottom’ of this recession and it’s unlikely that we will see a return to stable growth in Europe until this time next year.”

IDEA members’ confirm that the European supply network visibility continues to remain limited, however customer confidence has improved slightly with some re-stocking taking place. Strong demand in Asia is causing the lead times for some components to extend but generally availability remains good.

“Manufacturers are likely to remain wary of increasing their capacity until a longer term growth trend emerges,” added Fletcher. “The lack of visibility and any meaningful customer forecasts continue to hold back investment.”

Related links and articles:

European component sales through distribution continue decline

Distributors’ association sees end to declines

European electronic components market decline accelerates

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