According to members of the Interconnect Technology suppliers Association (ITSA) second quarter sales levels were up as much as 20 per cent over the same period in 2021, although adding the caveat that revenue growth had slowed slightly compared to Q1.
Bookings continue to perform well and some ITSA members reported that orders were up by as much 40 per cent with four key sectors – medical, security, data centres and telecom - driving the market.
ITSA members cited medical as a significant growth area - the slowing of the COVID pandemic has not impacted sales to medical equipment manufacturers. While sales to the defence sector continue to be strong, sales to test and measurement and industrial have levelled off.
Disappointingly, ITSA members reported a depressed railway market. Sales have fallen by 41 per cent compared to Q2 last year as UK rail companies continue to assess the impact of COVID on passenger numbers.
While warning of peaks and troughs, ITSA members remain positive about the final months of 2022. The book to bill ratio stands at a healthy 1.22:1, which they say, will deliver continued sales growth through the rest of this year.
Order books are strong as wary customers place longer-term orders to head off any lead-time issues. Another positive for the market is the willingness of ITSA members’ parent companies to invest.
However, there are clouds on the horizon with members listing lead times, material availability, labour shortages, higher employment costs, inflation, interest rate rises and political uncertainty as negative influences.
Looking ahead ITSA members' sentiments suggest 2022 may be a highpoint and that 2023 could prove to be significantly weaker.
Commenting ITSA chair, John Biggs said, “Significant global events have occurred since 2021. In particular, the war in Ukraine and political uncertainty and instability in the UK are having a marked negative impact on all areas of ITSA members business. This coupled with rising utility costs, higher prices on incoming materials, shortages in the semiconductor market, and increased labour costs mean that our members are fighting many battles to manage their business and the growth rates.
“ITSA members, along with the rest of the UK manufacturing sector, continue to face huge difficulties in recruiting skilled, experienced and qualified people and have started to investigate innovative ways to meet their recruitment needs. ITSA will be producing a separate, special press release on this topic.”
