Fragile Confidence Belies Bookings, Billings Upsurge

The European component distribution market bucked the usual fourth quarter decline in bookings and billings to show sequential growth. Bookings leapt 16 per cent on the previous quarter, billings registered a four per cent upturn.

This is according to the latest Distributor Total Available Market (DTAM) figures released by IDEA (International Distribution of Electronics Association). 

 

According to IDEA vice president Adam Fletcher (pictured), the consolidated Q4 ’09 figures are in line with the financial results reported by many sectors of the global electronic components market: “The electronic components market in Europe has suffered five quarters of declining revenue, followed by two quarters of growth. Comparing the annual market totals, billings in 2009 declined by 21% compared to 2008 and by 27% compared to 2007, so we have significant catching up to do in Europe to recover our position” Fletcher said. “The electronic components markets in Europe have historically grown in the first and second quarters each year and we have to hope that the trend will continue in 2010.”

 

The supply network visibility in the European Electronic components market remains limited despite anecdotal evidence of improving customer confidence, driven primarily by the growth in the bookings number. Fletcher suspects that demand in Asia is likely to slow in Q1 ’10, providing some short term relief on electronic component lead times in the rest of the world: “Given the current limited visibility in the supply network we should expect lead time volatility in the market as manufacturers re-commission “mothballed” capacity or add new capacity”, concluded Fletcher

 

Sector specific bookings changes in Q4 ’09 compared to the same period ’08 showed semiconductors on the up by 20 per cent. passive components declined by eight per cent and electromechanical and other components declined by three per cent. Total component bookins were also 10 per cent up on Q4 2008

 

Total European distribution billings in Q4 ‘09 improved by four per cent when compared to the previous quarter, but declined by 11 per cent compared to the same period in the previous year. semiconductors declined by 10 per cent, passive components declined by 14 per cent, while electromechanical and other components declined by 11 per cent.

 

The Book-to-Bill ratio declined slightly in Q4 ’09 but remained positive at 1.04:1.