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Distributors' association sees end to declines

May 13, 2009 //

The pace of decline of electronic components distribution in Europe slowed during the first quarter of the year but, according to the International Distribution of Electronics Association (IDEA), they still show every indication of bucking the historic annual billings trend of a strong Q1 followed by three declining quarters.


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LONDON The pace of decline of electronic components distribution in Europe slowed during the first quarter of the year but, according to the International Distribution of Electronics Association (IDEA), they still show every indication of bucking the historic annual billings trend of a strong Q1 followed by three declining quarters.

The IDEA figures also indicate bookings continued to fall, with the book-to-bill ratio falling in Q109 to 0.89:1.

The figures are below the association's previous guidance but in line with the financial results for all sectors of the global electronic components market, suggests Adam Fletcher, IDEA Vice President and chairman of the U.K components distribution association Afdec.

The decline in bookings in Q1 compared to the same period last year reflects continuing low business confidence and provides a strong indication that this year will not follow historical trends, said Fletcher. "A declining first half followed by a period of stabilisation in the second half of the year now seems a more plausible scenario."

Fletcher does see a few signs of optimism, noting some of the IDEA members' European distribution groups are reporting slight improvements in the supply network.

IDEA is now forecasting that Q2 billings are likely to decline by between 12 percent to 18 percent compared with the same period last year.

"I suspect we are now approaching the bottom of the economic cycle," commented Fletcher. "As anticipated lead-times in the supply network for some components are increasing slightly, not because of improving demand but because so much capacity has been taken out."

Total European booking through distribution channels in the first quarter were down by 3 percent when compared to Q4 2008, but a serious 21 percent compared to the same period last year.

Bookings of semiconductors declined by 33.5 percent year-on-year, passives by 24.8 percent, with the "Electro-mechs and Other Components category faring best, but still down by 23.5 percent.

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