For the second month in a row, the Electronic Component Sales Trends (ECST) survey from the Electronic Components Industry Association (ECIA) reported disappointing results in June. When combined with May, the two-month drop of 25 points in the index has effectively erased all progress from the start of the year.
The index fell by 13.4 points in June to slip below the 100-point threshold down to 98.9 points. A 100-point threshold is the point where a market is shown to have growth.
The good news is that ECST survey respondents expect a rebound in July with an outlook calling for an improvement of 13 points, recovering to 111.9 points. However, the ECIA said that confidence in this outlook “is shaky at best” considering the performance of the prior two months.
Sharpest decline
Among the major electronic component segments, semiconductors fell by 16.2 points in June and nearly 35 points from the past two months. Electromechanical components also saw a drop of 15.1 points in June resulting in an overall decline of 25 points during the past two months.
Passive components experienced a more relative decline with a drop of 8.7 points in June culminating in a decline of 15.5 points during the past two months. Overall, over half of respondents project growth for the third quarter but again that should still be tempered given the last two months of performance.
Solid sentiment
Unlike the core three electronic component groups, Manufacturers delivered a score of nearly 100 in June while Manufacturer representatives and distributors delivered an index below 100 points at 97.3 and 93.2 points, respectively.
Manufacturers and distributors forecast a strong July rebound with scores improving to 120.9 and 117.9 points, respectively. Manufacturer representatives, meanwhile, are more pessimistic and see scores declining further to 93.6 points.
Mixed results for segments
Results for the individual market segments were mixed with half sustaining scores above 100 — avionics/military/space, industrial electronics, computers and medical electronics — others fell below the threshold.
The outlook for July sees automotive electronics and consumer electronics are expected to deliver scores at or above 100. Telecom networks and mobile phones are seen lingering below 100, ECIA said.
The ECIA cautioned again that given the prior two months performance, uncertainty pervades the electronic component segments. The key question is whether the segment will have the support to improve despite a troubling economic environment, ECIA added.
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.
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