Biggest sales leap since 1996!
22 June 2009
It’s been a while since we saw a headline like that and for all that it is a genuine one, it does need a bit of context.
The figures come from Future Horizons who do a monthly report on the global semiconductor market. The June report, published earlier this week, indicated that sales in April had risen from March by 15.5% - the biggest March to April growth since 1996. While this has got to be positive the report argues that it is not necessarily an indication of massive growth in the near future.
What has happened, according to the report, is that everyone immediately stopped re-stocking as soon as collapse seemed inevitable last September. This de-stocking resulted in a ‘no stock left’ situation in the early spring and the growth recorded represents a positive over-correction to the negative over-correction that happened six months earlier – if you see what I mean. When the situation stabilises, within a few months, this over-inflated growth will stop and revert to a figure that represents the state of the market.
Trying to determine where we will be when we revert to a simpler supply and demand situation is almost impossible to fathom. I suspect it is a weakness in the British psyche that when things were getting worse then we enjoyed a good wallow in the mire and predicted that everything bad would happen that possibly could – except perhaps the extinction of mankind, but then we had swine flu to finish us off on that score too. Now there are real indications that the recession in most economies has at least bottomed out and is possibly starting to recover – and as a consequence our pundits on TV and in the newspapers start getting carried away with positive growth. Not quite double figure growth but it will only take a couple of good economic reports and Andy Murray to win Wimbledon before the forecast is for boom time!
Future Horizons are more measured in the predictions which are revealed in the full report or at a seminar in London on July 21st. If you would like more details on either then use THIS LINK. Decency prevents me from taking any more direct figures from the report (if I gave away all the details no one would buy their survey!) but I thought it interesting that from its examination of every market sector and geographical region there was only one ‘winner’. The Government/Military sector was the only one to grow, while every geographical region was down - Japan and China/Taiwan being the worst hit. But with most regions starting to show some signs of recovery, there is a real feeling in the electronics industry that the worst is behind us, both in the UK and further afield.
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