Last year, the UK electronics components market was declared to have returned to normality by Aubrey Dunford, the ECSN market analyst. However, this year, Dunford reclassified its status as a new, new normal. Despite uncertainties such as product availability, global trade and political tensions, and falling consumer confidence, component market sales in 2023 were high with a DTAM of £1886m and a TAM of £4254m, compared to £1722 (DTAM) and £3938m (TAM) in 2022. ECSN suppliers are preparing for 2023 with strong order books and confidence in customer demand, and an expectation that prices will generally be maintained.
A flat first half is expected for 2024, supported by the HM Treasury’s comparison of independent forecasts predicting UK economy average growth of 0.5% for 2023 and 0.4% for 2024. The second half of the year will depend on trade and political tensions, with added unrest in the Middle East and what effect that will have, not least in terms of oil price rises. The ECSN members are cautious for 2024 based on many statistics, including the high inventory making it difficult to judge demand. Price pressures will be minimal, and price levels achieved in 2023 are expected to be maintained.
There is still a demand for 5G and vehicle infrastructure systems, and some strong demand, particularly in the industrial sector, as UK manufacturing output rises. Dunford indicates that some market sectors will remain strong, but the overall picture is uncertain. It is important to note that manufacturers do not know how much stock is out there, as double-ordering of inventory through the pandemic is still to be worked through. The DTAM quarter-on-quarter growth since 2021 is related to price increases in a commodity market rather than increased unit sales. Authorized distributors remain key in helping the industry find its way through uncertainties, as stated by Dunford.
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