Slower growth rates forecast for EU electronic components markets

Announcing the consolidated figures, IDEA's chairman, Adam Fletcher, pictured, noted that the billings growth in the European electronic components markets slowed in Q4 in all European countries including Germany, a country previously viewed as the 'driver' of EU growth. "The current European quarter on quarter bookings declined by 7% in Q4 with Billings declining by 4%, much in line with our forecast," said Fletcher. "As things stand in Q1 2011 distributors have strong order backlogs and a balanced inventory profile, perfectly positioning them to meet their customers' demands, which unfortunately remain vague." Historically, Q1 has been a reasonably strong quarter for European component distributors but, according to IDEA, the current uncertainty in the macro-economic environment is making customers nervous and impacting confidence throughout the supply network. Global demand for electronic components however remains strong but inventory across the supply network remains 10 to 15% below previous industry norms. "Although the general availability of electronic components has improved significantly with manufacturer lead times expected to normalise in the 8 to 10 week range there will be no returning to the Ex-Stock delivery situation that customers have enjoyed over the last decade any time soon," Fletcher observed. "My best estimate is that in Q1 2011 billings will be sequentially 'flat' in Europe, with modest growth in the remaining three quarters." Bookings Total European distribution bookings (net sales orders entered) in Q4 2010 declined by 7% when compared to the previous quarter, but grew by 19% when compared to the same period in the previous year. Sector specific bookings changes in Q4 2010 compared to the same period 2009 were as follows: • Semiconductors: Increased by 18% • Passives: Increased by 22% • Electro-mechs and Other Components: Increased by 20%. Billings Total European distribution billings (net sales invoiced less credits) in Q4 2010 declined by 4%, when compared to the previous quarter but increased by 37% compared to the same period in the previous year. Sector specific Billings changes in Q4 '10 compared to the same period '09 were as follows: • Semiconductors: Increased by 43% • Passives: Oncreased by 31% • Electro-mechs and Other Components: Increased by 22%. Book to bill At 1.07:1 the overall Book to bill ratio in Q4 2010 showed a decline of six points compared to the previous quarter.