In a surprising result, the May-to-June survey of the Electronic Component Sales Trends (ECST) from the Electronic Components Industry Association (ECIA) found that sales sentiment hit a five-year high at 154.1 points.
A score of above 100 represents growth in the ECIA report.
ECIA said the results are surprising given that in the May survey it called for the average index to drop by more than 15 points. However, the actual change between May and June was a 7.5-point improvement.
That said, ECIA said that survey participants continue to lack confidence in the future market direction with July forecasted to drop nearly 17 points, down to 137.2 points. The pessimism is across all component categories with passive component index outlook expectations dropping 18.9 points in July. The smallest decline in July is expected to happen in the electro-mechanical component segment of 14.3 points.
But even with the component index average dropping to between 129 points and 147 points, it is still a strong score that is well above the 100-point threshold for growth expectation.
Divergence outlook
ECIA reported that manufacturer representatives diverge sharply from the overall average July forecast with expectations projected to be stable in July with a decline of only 3 points.
In contrast, manufacturers and distributors are pessimistic about July with a severe drop between 20 points and 25 points.
End market still growing
The best news in the end-market section of the survey index was all but two product sub-segments that exceeded the 100-point threshold for June and are expected to continue in July. Only consumer electronics and mobile phones are expected to drop below 100 index points.
Lead time pressure falling?
ECIA has documented that for many months lead time pressure has been increasing but in the June report, it appears that pressure is easing as respondents reported lead times decreasing from 77% to 70% between May and June.
Passive component lead time pressure dropped a negligible amount with only 2% and the strongest lead time pressure was found in the semiconductor segment with 87% lead times.
Overall, while economic issues continue to persist, those in the electronic components supply chain continue to be very positive about the outlook.
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 components 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 outlooks, 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 information.
