Optimism fades
Staff -- Purchasing, 4/17/2003 2:00:00 AM
Optimism that electronics buyers expressed in February about new orders appeared to fade in March. Fifty-three percent of buyers in February said they expected their purchase orders to increase in the next 90 days. However, in March only 39% reported that they expected purchase orders to rise, according to PURCHASING magazine's monthly survey of electronics buying conditions.
The pessimism is also reflected in the Business Activity Index. The index fell from 57.4 in February to 48.2 in March. Thirty-three percent of electronics purchasers reported business was up from the month before. In February 39% said business was up. Thirty-six percent said business was down in March, compared to just 25% in February.
Analysts often point out that the first quarter is often the weakest quarter for the electronics industry and that weak demand and low business activity is not unusual for the first three months of the year. However, the weak numbers suggest that an upturn in the electronics industry is not on the immediate horizon.
Anecdotally, many suppliers say they are not expecting much of a turnaround in 2003. They say that business will pick up in the second half of the year, but growth will not be stellar. Cell phones, medical equipment and military electronics will drive some component demand. Computer growth will be in the single-digit range as businesses are slow to upgrade their aging computing systems.
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