2020: A year like no other, with very few positives for the UK interconnection sector

09 March 2021

ITSA 2020 report_Connector sales by market sector
ITSA 2020 report_Connector sales by market sector

Reflecting on a tough year in 2020 for the interconnection sector, ITSA (Interconnect Technology Suppliers Association) reports that connector revenues declined by 10%, while orders were down 14%. The communications & medical sectors actually grew in the face of the COVID-19 pandemic, while sales through distribution were down 15%.

Like everyone, members of trade body, ITSA, the UK’s Interconnect Technology Suppliers Association, were extremely glad to see the back of 2020. Now, with a Brexit deal done – “The jury is out on that one,” says ITSA Chairman, John Biggs – and increasing confidence in the vaccine programme, 2021 has all the makings of a year where the connector industry will make up some of the losses experienced during the first nine or ten months of the pandemic.

Year-on-year comparisons cannot, in any way, be reflective as the market was affected globally by a pandemic that had a totally unexpected impact on every aspect of our members businesses,” says Biggs.

At the same time, we also had Brexit, which clearly added to the uncertainty, although members experienced a degree of contingency stocking across many industries to protect against a no deal. In the end, that was not needed, but the true impact is still unknown.

Now that the Brexit dust has settled, we are in the process of producing a report on the deal and how it has impacted members,” Biggs concludes.

10% revenue decline
In 2020, ITSA’s membership saw an overall UK revenue decline of around 10% (dropping back to 2017 levels), although orders were down 14%. What was interesting is the fact that the export data reported was very similar to this. Despite a reduction in sales last year, the feedback coming from the industry is that profitability was maintained or, in some cases, impacted only minimally thanks to pandemic-related cost savings on travel, exhibitions and so on.

Certain market sectors experienced a huge negative impact. For obvious reasons, consumer was down 88%, but thankfully this sector represents only a fraction of ITSA members sales. Broadcast and entertainment were down 45%, which came as no surprise, but all the talk of shows, events and festivals on the horizon should be positive news for this sector.

Distribution was also badly affected, to the extent of a 15% reduction, and this had a particularly noticeable impact on member sales.

Sectors with positive news were communications, up 29%, probably due to the investments made to meet the increased demand for broadband bandwidth for home working and schooling, and medical, which was up 86% for obvious reasons.
 
Value Add, which is a significant portion of members revenues, declined by 19% in 2020, with fibre optic down by 41% and hybrid by 78%. It’s worth noting that some of the reduction in hybrid can be attributed to a number of  ITSA members moving manufacturing to other locations within their corporation.

2021: A tough Q1 & Q2, with a stronger Q3 & Q4
For 2021, ITSA members are looking at a possible small negative or flat first half, and then potentially a stronger second half as the Government’s infrastructure projects and incentives in the budget could help economy to recover. Most members are projecting that they will return to 2019 levels by the end of 2022; however, some analysts are predicting a 4-year recovery.

A very positive aspect is that members’ parent companies continue to plan investments and developments, and it is really heartening that they seem to be taking this difficult period to look to the future and plan ahead.


Contact Details and Archive...

Print this page | E-mail this page