21 May 2024 -

Electronics industry shows resilience; US manufacturing grows modestly

The electronics industry is showing robust growth and optimism for the remainder of 2024, despite a more cautious outlook for the broader US manufacturing sector.

The Electronic Components Industry Association (ECIA) reports a significant surge in sales momentum for electronic components in April, with the trend expected to continue into May. This positive sentiment is shared across distributors, manufacturers, and manufacturer representatives, signalling a unified outlook for the sector.

End markets are also showing improvement, with all segments except automotive experiencing positive sentiment in April. The outlook for May is even more promising, with the automotive sector expected to join the upward trend.

This positive momentum contrasts with the more subdued forecast for the overall US manufacturing industry. The Institute for Supply Management (ISM) predicts a modest 2.1% revenue growth for 2024, a significant decrease from earlier projections. This more cautious outlook is primarily attributed to persistent inflation concerns and economic uncertainty.

Despite the broader economic headwinds, the electronics industry remains resilient. While chip manufacturers and distributors are still working through excess inventory, the sector’s historical performance suggests that such recoveries often outlast more volatile market fluctuations.

Tim Fiore, chair of the ISM’s manufacturing survey committee, acknowledges the positive signs within the sector, stating that 12 out of 18 industries expect revenue growth in 2024. He also emphasised that the current progress, although incremental, represents a positive shift from the stagnation of 2023.

As the broader manufacturing sector navigates challenges, the electronics industry appears poised for continued growth in the second half of 2024. The ECIA’s forecast for sustained upward momentum, coupled with increasing demand across various end markets, indicates a promising future for the sector.

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