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Are you seeing signs of a recovery?

M_B

I just wanted to get the views of you, the people we deal with.

 

From my point of view things are very different to how they were in 2008. I don't even work for the same company, but I can tell the UK electronic components industry has taken a fair hammering. Anecdotes from my colleagues now talk of how very large orders were commonplace, the likes of which we rarely see now.

 

The distributors seem to be doing OK, some better than others, but is that because manufacturers have stopped buying direct (because they can't) and turned to distis instead?

 

Or am I just being pessimistic?

 

Will we stay like this for a while? Will we stay like this forever? Are some of the trends (e.g. moving production to the Far East) irreversible? Is the market just adjusting itself for good?

 

As an economist, I find this all quite interesting, though I would rather watch a speedy recovery.

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    It is a very interesting question..or questions since there are several.

     

    I know at Farnell we are doing very well at the moment. The sudden upturn in demand for components means it has taken a while to ramp up production for some producers. I think people have more confidence ordering from distributors such as Farnell, when they can see what is available, rather than maybe suffering from lead times from buying direct. If someone wanted to buy a large quantity of components directly, would there be much of a lead time? 

     

    Maybe the solution to this is the ownership of production facilities rather than outsourcing. Outsourcing production sounds good financially, but when things change for the better everyone floods independant facilities with orders..and where you are in the queue probably depends on the size of the order. Companies seem to move where production cost is lowest and access to markets and tax benefits are best. Being from "silicon glen" myself, I've seen IBM, Compaq, Digital, and a few more come and go. Can China keep production costs low forever?

     

    Globally almost every country, maybe with the exception of China, has deficit problems, some more serious than others, hello Ireland! I think the whole situation depends on how governments go about cutting deficits without stifling recovery. This is especially true with the US, whose economy still leads the world.  

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  • 0

    It is a very interesting question..or questions since there are several.

     

    I know at Farnell we are doing very well at the moment. The sudden upturn in demand for components means it has taken a while to ramp up production for some producers. I think people have more confidence ordering from distributors such as Farnell, when they can see what is available, rather than maybe suffering from lead times from buying direct. If someone wanted to buy a large quantity of components directly, would there be much of a lead time? 

     

    Maybe the solution to this is the ownership of production facilities rather than outsourcing. Outsourcing production sounds good financially, but when things change for the better everyone floods independant facilities with orders..and where you are in the queue probably depends on the size of the order. Companies seem to move where production cost is lowest and access to markets and tax benefits are best. Being from "silicon glen" myself, I've seen IBM, Compaq, Digital, and a few more come and go. Can China keep production costs low forever?

     

    Globally almost every country, maybe with the exception of China, has deficit problems, some more serious than others, hello Ireland! I think the whole situation depends on how governments go about cutting deficits without stifling recovery. This is especially true with the US, whose economy still leads the world.  

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