LONDON Net sales or bookings of components by members of the UK's Association of Franchised Distributors of Electronic Components (AFDEC) in the fourth quarter of 2006 declined by 5 percent compared to the previous quarter but increased by 3 per cent on the same period the previous year.
Net sales revenue (billings) declined by 5.8 percent compared to Q3 2006 but increased by 4.8 percent on the same period 2005. AFDEC says much of this growth is attributable to a significant improvement in the semiconductor market segment.
The overall book-to-bill ratio in the fourth quarter 2006 remained flat at just below unity at 0.99:1. For the whole of 2006 billings of AFDEC members 4.9 percent compared with 2005.
AFDEC members reported debtor days declined slightly in Q4 2006 to 66.5 days, with inventory turn down slightly to 2.2 times.
Billings in the last quarter of the year are usually lower than the third quarter as demand drops off in December, which has become almost a 20-day month. “The last quarter of 2006 was no exception,” said Adam Fletcher, AFDEC chairman. ” The UK sales revenues of AFDEC members in the last quarter of the year decreased by nearly 6 percent on the third quarter, with a decline in all reporting categories except component assemblies.
AFDEC's original forecast of 2006 DTAM growth, made in October 2005,proved to be too pessimistic. The Association did expect that the 2005 decline would reverse but in the event the improvement was greater than it expected. The improvement was due primarily to a better than forecast upturn in the European economic conditions and the increase in the semiconductor market which having suffered the largest decline in 2005, experienced the greatest increase in 2006.
The slowest growing category was Passive Products. The steep decline experienced by the component assemblies sector was due to the cancellation of one very significant project in 2006 and is not indicative of any trend. AFDEC expects this market segment to revert to growth in 2007, inline with the other reporting categories.