Adam Fletcher, chairman of the Electronics Components Supply Network (ESCN), recently announced that the run of twelve consecutive periods of growth have halted unexpectedly in April ’19. Despite the number of bookings increasing, Q1 ’19 shows a 1.3 per cent decline in billings. Total monthly billings in April ’19 declined by 16 per cent when compared to the previous month. But thanks to continued growth in the semiconductor sector, they still maintained a similar result compared to the same month of the previous year. The sales by month average for all electronic components is also suggesting low growth, heading into the second quarter of 2019.
“This is a disappointing result and well below the Q1 ‘19 billings growth of 5 per cent to 11 per cent forecasted by our members in December last year”, Fletcher said. He puts much of the decline down to the fact that customers have been consuming the buffer inventory they stockpiled, in response to the Brexit delay and tough market conditions: “For the same reason, ESCN’s AFDEC members have also been juggling their inventory, in an attempt to hold it in-line with actual customer demand”, continued Fletcher. “But as the Brexit date remains fluid, all organisations will have to retain buffer inventory for a bit longer than they expected, which will add significantly to their costs, until the extra inventory is finally consumed.”
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