The electronic component sales sentiment demonstrated a robust upward trajectory last month, surging by 7.3 points in comparison to the July index, as indicated by the leading market trends survey by the Electronic Components Industry Association (ECIA). This upswing has been part of a consistent trend that commenced in June, with sales sentiment for August reaching an impressive 90.3, as reported by ECIA.
Even more encouraging is the ECIA’s projection for September, suggesting that the electronic component index is set to continue its growth, reaching a score of 94.9. This would mark the highest score since February of the same year, reflecting an astounding increase of 22.5 points compared to the May 2023 survey.
The survey data reveals that various sectors within the electronic components industry are exhibiting distinct expectations for August. Electromechanical/connectors experienced only a marginal improvement over July, failing to meet expectations. In contrast, semiconductors surpassed expectations with notably improved scores between the two consecutive months.
ECIA further speculates that it is conceivable for sales sentiment across all categories to breach the 100-point threshold, widely regarded as the benchmark for high demand, sometime in the fourth quarter. This could potentially signal the onset of a comprehensive resurgence in growth, commencing in 2024.
An enduring trend over the past few months has been the persisting sales gap between manufacturers and manufacturer representatives. Manufacturers have consistently reported product sales sentiment scores that are 8.1 to 9.9 points higher than the overall average between July and September. In contrast, manufacturer representatives have scored notably lower, with scores ranging from 8.0 to 16.2 points below the overall average. Distributors, on the other hand, have remained closely aligned with the overall average.
This disparity initially surfaced in April and has continued through August. ECIA posits that this divergence is possibly due to the differing experiences of manufacturers in the direct business sector, where they have witnessed robust performance, while distributors continue to grapple with inventory balancing challenges, potentially impacting their sales sentiment.
The findings from ECIA’s quarterly ECST survey suggest that a revitalized quarter-to-quarter growth trajectory may potentially commence in early 2024. The sales sentiment for balanced sales between Q2 and Q3 stood at 44%, with expectations now pointing towards sales equilibrium in Q4.
Moreover, an optimistic outlook prevails across all end markets, with the most significant improvements anticipated in consumer electronics, industrial electronics, medical electronics, and computer electronics. Furthermore, the avionics/military/space, automotive, and industrial electronics sectors are all anticipated to cross the 100-point threshold in September, indicating a promising outlook for the industry as a whole.
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