UK/Ireland distribution market tipped for 2017 growth

4th December 2016
Posted By : Mick Elliott
UK/Ireland distribution market tipped for 2017 growth

Distribution industry association afdec is forecasting a 2.5 per cent uptick in UK and Ireland component distribution sales to £1.08bn in 2017. Analyst Aubrey Dunford says that semiconductors are fuelling the growth, and that distributors are growing their share of the overall electronic components total available market (TAM).

In 2017 semiconductor sales are forecast to edge forward to close to £600m. Electromechancal component sales will head past £250m, and passives will remain virtually flat at £130m.

These positive outcomes are being achieved against a backdrop of uncertainty following the Brexit vote and the recent US Presidential election.

UK and Ireland-based distributors are picking up on opportunities.

"There is frenetic activity in the IOT space – Industry 4.0, Smart Home, Connected Car, Remote Medical Diagnostics etc – but other sectors such as Lighting, Aerospace & Defence and Automotive are still important and healthy”, said Graham Maggs, Vice President, Marketing, EMEA for Mouser Electronics.

"It's too early to judge the impact of Brexit, but the UK continues to produce innovative designs through a good mixture of existing and new customers particularly focused in the wireless (IOT) and automotive (power & analogue) arenas, commented Joel Munday,Engineering & Marketing Director UK, Ireland, Benelux and Eastern Europe for Arrow Electronics.

Healthy inventory levels and short lead times are also aiding progress.

“People are buying to demand,” observed Dunford. “If they want it, they buy it.”

The 2017 rise in component demand will be based on an against the odds recovery which was highlighted by a five per cent increase in sales in the second quarter of 2016. This will help propel UK/Ireland distribution sales to three per cent growth across the year, one per cent ahead of the afdec forecast.

The distribution sector’s share of the UK/Ireland component TAM will push past 40 per cent in 2017, Dunford believes.

This is being driven by shorter term buying trends which favour distributors, the fact that small to medium size enterprises (SMEs) drive the distributors’ share of the UK and Ireland market and distributors’ sharper sense of the opportunities to engage with customers at the early design stages of a project.

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