March components performance figures ‘outstanding’ says afdec

afdec and ECSN chairman Adam Fletcher (pictured), said the figures are indicative of improving demand and activity from UK customers. Fletcher noted: "This is an outstanding result and certainly beyond my expectations, but a single swallow doesn't make a summer. There is still no single identifiable demand driver in the UK (or elsewhere), so I suspect we may be witnessing a peak in the UK demand cycle that's likely to flatten out somewhat over the next quarter. Component manufacturing lead times are settling down on longer lead-times than the average over the last few years. Sporadic product shortages are occurring in some areas but manufacturers are responding quickly to resolve them." Compared to the same period, 2009, the billing changes by product group for 2010, increased as follows: Semiconductors 38.2% Passives 33.1% Electro-mechs16.9% Component assemblies14.4% Other products declined by 27.9%. According to afdec, the book to bill ratio in March '10 declined to 1.06:1 in all product groups with the exception of Other products, as authorised distributors converted Q1's strong bookings into billings. The overall stock turn improved to 2.9 times, with total inventory increasing by 4% to £168million, yielding an improved 'turn / earn' ratio of 93:100. The overall debtor days declined by three days when compared to last month and remain within the normal range. "The positive book to bill ratio in March is great news especially in such a high billings month," Fletcher continued. "It seems that customers are placing significant additional order cover and that they are consuming the materials they buy. The sales by month 'three month moving average' continues to trend up in every components sector, suggesting that further billings growth is likely in Q2 '10. We must however continue to exercise care and maintain close control of costs particularly inventory through this period of unexpected growth."