UK and Ireland component distributors reported total monthly billings in June increased by 31% when compared to the previous month and by 13% when compared to June last year. Overall bookings in June maintained the trend, increasing by 11% compared to the previous month and by 6% on the same period last year.
Releasing the market update ecsn chairman Adam Fletcher said that sales by month “three month moving average” for all electronic components suggests slight growth into July ’16, which according to Fletcher is “much in-line with historical trends.”
“An improved Billings performance in June is welcome good news”, said Fletcher “but the figures are flattered somewhat by poor May results and the fact that our members benefited from three additional working days in June.”
Fletcher is more upbeat about the double digit growth the UK authorised distribution sector had experienced in June compared to the same month last year:
“This growth has been primarily driven by the semiconductor market, which is generally a leading indicator,” he explained, “but the UK remains pleasingly at odds with the global market where overall semiconductor demand is at best static or even slightly declining.”
ecsn is however concerned about the collapse in the Book-to-Bill (B2B) ratio, which the association views as a key indicator of the health of the UK component market. In June ‘16 the B2B ratio came out at 0.91:1, a further 16 point decline compared to the previous month.
According to Fletcher, customers appear to be consuming increasing volumes of product but are not placing the orders necessary to maintain their inventory, which he says “seems odd…” Despite the negative B2B result in June, Fletcher believes that the polynomial trend line suggests an overall positive B2B ratio is likely to continue.
ecsn’s afdec members are very positive about their prospects in the UK / Ireland electronic components market according to Fletcher: “The June results have given rise to optimism in amongst our authorised distributor membership but we remain in a period of some uncertainty,” concluded Fletcher. “Although equity, currency, commodity and bond rates have stabilised post Brexit we’ll just have to wait and see what the next quarter brings…!”