September Authorised Distributor Returns Show Encouraging Growth

- but manufacturer lead-times for electronic components are likely to extend in the foreseeable future.

The latest figures from authorised distributor (afdec) members of the professional supply chain community the Electronic Component Supply Network (ecsn) confirm the Markit/CIPS UK Manufacturing PMI findings that manufacturers are continuing to experience solid growth in new orders, output and staffing levels. But with input price inflation at a six month high, material inventory lead-times are continuing to extend and supply networks are being stretched.

Authorised distributor total monthly billings (net sales invoiced less credits) in September ‘17 were up by 14% compared to the previous month and increased by 13% when compared to the same period last year: Changes by product group when compared to September 2016 are: “Semiconductors” increased by 16%, “Passives” increased by 12%, “Electro-mechs increased by 8%,“Component Assemblies” increased by 21% and “Other Products” increased by 11%".

September also saw overall bookings (net sales entered) increase by 23% when compared to August '17 and increasing by 23% on the same period last year, however the Sales by Month 'three month moving average' for all electronic components suggests a slowing of growth into Q4. According to ecsn chairman Adam Fletcher the Book-to-Bill ratio in September ‘17 increased by 8 points to 1.04:1: "A recovery in the B2B ratio is always welcome but it needs to be sustained," Fletcher said. "The B2B still appears weak given the underlying electronic components market conditions. "

"Extended manufacturer lead-times for electronic components are likely to continue, certainly throughout 2018 and probably beyond, " continued Fletcher. "UK customers must continue to increase their order cover for electronic components to match extending manufacturer lead-times in-line with this new reality. Failing to do so is - on the balance of probability - likely to lead to supply problems towards the end of the year and on into 2018. ecsn's afdec members will continue to invest carefully in additional inventory to support their customers and provide a vital link in balancing the supply and demand needs in the UK electronic components market ", he concluded.

 


T&M Supplement

The Annual T&M Supplement, sponsored by Teledyne LeCroy, was published in July. Click on the image above to read this exclusive report for free.

Follow us