“General positivity” post-Brexit for manufacturing

12 October 2016

Adam Fletcher, Chairman of the Electronic Components Supply Network said latest figures reflect general positivity in UK manufacturing following Brexit.

The overall ecsn member results for August were firmly in line with the Markit/ CIPS UK Manufacturing PMI results, which showed a 53.3 rating, the largest month on month change increase for 25 years.

In a charge led by the association's “Semiconductors”, “Passives” and “Electro-mechs” reporting sectors, the consolidated Bookings and Billings performance of ecsn's AFDEC members in August 2016 was better than expected. UK manufacturing generally weakens in August each year as a result of organisational summer holidays. Overall Bookings declined by (11%) in August 2016 compared to the previous month but showed an encouraging 6% increase compared to the same month 2015. Surprisingly the Book-to-Bill ratio in August‘16 declined by 16 points to 0.93:1, but Fletcher says that: "Whilst there are occasional monthly dips the polynomial trend line suggests a positive B2B ratio is likely to continue." The overall Stock Turn remained ‘flat’ at 2.2 turns, with total  inventory only marginally declining so manufacturer authorised distributors have good inventory levels to support this upturn in customer demand. The Sales by Month “three month moving average” for all electronic components suggests slightly increasing growth into September’16, much in-line with historical trends.

Concluding his report Fletcher said ecsn afdec members remain very positive about their prospects in the UK / Ireland electronic components market: "Our forecast is for a slight improvement in Billings growth quarter on the same quarter 2015 towards the end of the year. This appears challenging but I'm optimistic that it will be achieved," Fletcher concluded.

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