The electronic component sales sentiment improved in July with an improvement of 6.7 points, according to the latest Electronic Component Sales Trends (ECST) survey from the Electronic Components Industry Association (ECIA).
Maybe more importantly, however, is the monthly survey found the outlook for August to continue the recovery of overall sentiment after a brutal May and June. In July, the overall index rose to 83.0 and is forecast to grow to 94.7 points, which will be the highest level in the last year, ECIA said.
Among those categories that had the largest improvement, passive components rose 10.4 points in July while electro-mechanical/connectors category jumped 17.5 to pass the 100 threshold.
However, ECIA cautioned that the forecasts are just that projections and actual results could differ substantially from what is predicted. But the organization is hopeful that the industry has moved past the double dip in sentiment that it experienced in the past year and the market can sustain recent improvements.
As documented previously, a major different gap has developed in sales sentiment between manufacturers compared to distributors and manufacturer representatives. The difference started between April and June showing a divergent view of the world with manufacturers much more positive compared to distributors.
According to the ECIA, one explanation could be that manufacturers are seeing stronger performance in direct business while inventory balancing in the distribution channel continues to weigh on distributors. Interestingly, the gap narrowed substantially in July between the channels with the distributor view improved above manufacturers forecast for the August outlook.
In fact, the ECIA said the overall outlook brings all three groups into much close alignment with the manufacturer representatives overall scores registering between the distributors and manufacturers. This could indicate the distribution channel is resolving inventory imbalances and responding more in line with end market demand.
The ECIA survey forecasts for August the overall end-market to be stable between 77.1 and 79.5 between May and July. However, the August outlook is expected to jump by 15.2 points.
This outlook extends to all markets with improving sales sentiment except for avionics/military/space, which is already above 100. Markets expected to pass the 100-point threshold in August include:
- Automotive electronics
- Industrial electronics
- Medical electronics
The lowest end market score is expected to be computers with an index score of 82.7 in August, but this is a jump of nearly 48 points from November, ECIA said.
About the ECIA ECST report
The ECST survey provides highly valuable and detailed visibility on industry expectations in the near-term through the monthly and quarterly surveys. This “immediate” perspective is helpful to participants up and down the electronics components supply chain. In the long-term, ECIA shares in the optimism for the future as the continued introduction and market adoption of exciting innovative technologies should motivate both corporate and consumer demand for next-generation products over the long term.
The complete ECIA ECST report is delivered to all ECIA members as well as others who participate in the survey. All participants in the electronics component supply chain are invited and encouraged to participate in the report so they can see the highly valuable insights provided by the ECST report.
The monthly and quarterly ECST reports present data in detailed tables and figures with multiple perspectives and covering current sales expectations, sales outlook, product cancellations, product decommits and product lead times. The data is presented at a detailed level for six major electronic component categories, six semiconductor subcategories and eight end markets. Also, survey results are segmented by aggregated responses from manufacturers, distributors and manufacturer representatives.
Interested in reading the entire ECST report? Click here for more info.