Bookings Boom Causes Concern At afdec

An unhealthy rise in UK distribution bookings is causing some concern at afdec Distribution Supply Network Group within the Electronic Components Supply Network (ECSN).

afdec’s consolidated June 2010 figures show electronic component distributors in the UK and Ireland reported a 23.8 per cent increase in billings compared to the previous month and a 37.9 per cent improvement over the same period last year. All well and good.  

 

The association’s chairman Adam Fletcher (pictured left) is however a lot less comfortable with the 87 per cent bookings growth in the semiconductor product group and the 58 per cent growth in the passive product group (compared to the same period last year) his members also reported  for June: “This exceptional level of bookings growth is unsustainable and increases my fears about double ordering by customers, especially when I compare these figures with the 27 per cent growth achieved in the electromechanical components group, because these products are required in the same ratio to produce the same volume of electronic systems”, Fletcher said.  

According to Fletcher distributors in the Nordic region and elsewhere in Europe are experiencing similar growth trends but the difference between the products sectors is beginning to level out.

 “I’m sorry to be the ‘party pooper’ but the current billings growth trend exhibits all the signs of an “it’ll all end in tears” scenario, cautioned Fletcher . “I reiterate my comments from last month. All ESCN members need to proceed with caution; carefully balancing their inventory with real customer demand and communicating their needs within their supply network. Failing to do this effectively may jeopardise output and result in an unwanted glut of inventory.”

 

Comments

[mick]

Ingo,
Many thanks for your comment, and apologies for the slow reply, I'm just back from a holiday where my wife banned the laptop! Quite right too!
I couldn't agree more with you and Adam, the present exuberance just does not match up to the current economic circumstances. I think it is interesting (and sensible) that some component makers (particularly the Japanese) are not ramping up production too quickly. They want to see a more resilient economic recovery.

[Ingo Guertler]

Adam,
i agree with you. Same or similar high bookings are seen in other european countries, The current bookings do not reflect the current economy growth.I asume, we see a similar disaster in the first quarter 2011 as we have seen 2001/2002.This the time, when the production facilities have adapted their capacity to the actual demand.