ITSA sees connector orders surge

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Business is booming in the UK connector market says the Interconnect Technology Suppliers Association (ITSA). At its recent quarterly meeting (the first face to face for two years) member companies reported increases in sales between 8% to 20% year on year and UK orders are now up over 43% on 2020 and up 16% on 2019.

ITSA members’ book to bill ratios are now an average of 1.08:1 in 2021.

Overall ITSA members’ sales are up an average 14% YTD versus the same period in 2020 and even more interesting is that members are now tracking up 5% versus 2019

“Even higher levels of growth are being recorded in some market segments,” says John Biggs, ITSA chairman. “Test and measurement grew 31%, broadcast is up 32% and mass transport rose 18%.”

The medical market saw a reduction of 11% over 2020 but it is still up 63% over 2019.

Value Add sales surged again in the third quarter of 2021 and members are now reporting a growth of 45% driven by Fibre Optic, up 90% and Coaxial solutions up 67%.

Distribution continues to be very buoyant with sales now up 71% over 2021 and up 36% over 2019, and that’s a good barometer of market activity,” adds Biggs.

Future order books are strong, and ITSA members continue to experience extraordinary demand in 2021 but feel that this is not likely to continue into 2022 at the same level.

Costs and prices on the rise

This good news has to be seen in the context of increased costs affecting all industries – and connector makers are not immune.

Raw materials are more expensive, and transportation costs are rising steeply. For example, the cost of a container to transport product from the Far East has risen from £2,000 to £18,000 in the past year.

Energy prices are on the increase as are employee costs as companies strive to fill vacancies to cope with order demand.

“This is not just a result of Brexit,” asserts John Biggs. “Apart from increased red tape, Brexit seems to have had a minimal impact. The issue is a global one and everyone is facing the same increases in costs.”

This is also supported by the IHS/Markit CIPS report for UK manufacturing, which instanced supply chain delays, rising material and labour shortages as constraints on businesses.

While suppliers have absorbed some costs, price increases have been imposed on customers, ITSA members confirmed.

Lead times, double ordering a concern

A major concern for ITSA members is lead times

“They are having a major impact on member companies with some raw materials having up to 1-year lead times – although this is rare,” explains Biggs.

ITSA members are also concerned that there has been double of even triple order booking in the order pipeline. This could lead to cancellations in the future.

Covid could be a game changer

ITSA members also addressed the COVID elephant in the room.

Working practices have changed and ITSA chairman John Biggs revealed that most members believe industry will not return to the old way of everyone in the office.

“Many have implemented hybrid working policies,” he comments. “It would also seem that face to face sales/design/application meetings may not return to pre COVID levels but this did vary between member companies, whatever happens moving forward one thing is for sure and that is we have entered a different way of conducting business which will impact all members, their customers and the markets for some time to come.”

All members were positive about 2022 and beyond and most expected moderate growth to continue.

About ITSA

The Association’s origin can be traced right back to the early 1980s when it was fashionable to include specific interest groups within the Electronic Components Industry Federation or ECIF. Being fundamental to everything that is technology based, interconnection was a natural choice for an interest group and so the Connector Manufacturers Association (CMA) was established.

Through several changes, the CMA became the Interconnection Business Forum or IBF which itself stopped functioning around 2005. In 2008, ITSA was formed by several ex. CMA and IBF members as the British Connector Manufacturers Association and was relaunched in 2017 to more accurately reflect the activities of its members. It is the only dedicated trade industry body for interconnect technology companies operating in the UK.

ITSA has a presence on several standards bodies where the aim is to influence both current and future changes to standards affecting the interconnection sector. These include the appropriate BSI standards committees as well as RoHS compliance and exemption groups like the Oko Institute and the RoHS umbrella group.

Editorial Contact:

John Biggs

Chairman

ITSA

Tel: 07768147677

Email: jbiggs.itsa@btinternet.com

ITSA appoints Mick Elliott as its new PR and Communications specialist

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We are delighted to announce that Mick Elliott has been appointed to handle PR and marketing communications for the Interconnect Technology Suppliers Association (ITSA).

Industry veteran Elliott has been covering the UK and Ireland electronic components industry for the past 45 years working for Electronics Weekly, EPN and for Electronic Specifier.

Says Elliott, “I am delighted to take this post with ITSA. The Association plays a progressive role in promoting the interconnect components industry in the UK and Ireland as well as providing an authoritative voice and wise counsel to industry standard bodies and the UK government.

Commenting on this exciting appointment, John Biggs and Peter Hannon (Chair and Vice Chair) said “We are absolutely delighted to have Mick Elliott as ITSA’s new PR and Communications agent, Mick is extremely well known in the industry and with his extensive experience we are certain that ITSA will get even greater exposure and recognition”

Smiths Interconnect Unveils 2020 Distributors of the Year

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Smiths Interconnect has recognized its valued distribution partners for their outstanding performance in advancing the company’s business across the world in 2020.

The Global award was offered for the first time and went to TTI Inc. thanks to the prominent worldwide activity of the distributor.

TTI Inc. is used to being among the winners every year thanks to its annual contribution to Smiths Interconnect’s success and to the recognized business collaboration based on a reciprocal appreciation and trust.

 

The regional awards for 2020 have recorded some new additions to the list of winners with the celebration of key partners in Americas, EMEA and ASIA.

For Americas, Mouser Electronics Inc. was awarded as best performing distributor thanks to its outstanding activity in the sale of board text fixture probes.

 

The distribution award in EMEA went to CEL S.A., an important partner in the sale and value added services for high reliability connectors in France, whilst the distribution award for Asia went to Wai Tat Electronics Ltd, an established partner with significant design-in activity throughout the year.

 

Paul Harris, President at Smiths Interconnect said, “Smiths Interconnect places great value in our distribution partners.  Both global and regional approaches are appreciated and are critical to our growth”.

Eric Lakin, VP Finance and Strategy at Smiths Interconnect concluded: “Whilst in-person events during the Covid-19 pandemic are not possible, we did not want to lose the opportunity to celebrate the achievements of our valued partners and to underline their strategic importance in our business growth.”

 

ITSA – Connector sales growth escalates in Q1 of 2021

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  • Member sales increase by 15% in Q1 compared to Q4 2020
  • Distribution, Broadcast and Industrial all show double digit growth
  • Fibre sales up 57% recovering the Q4 downturn
  • Circular up 28%
  • Value add recovers by 22%

2020 was, in many ways, a year to forget with the COVID pandemic severely affecting members revenues and BREXIT just adding to the uncertainty. The third lockdown over the winter just emphasised how unpredictable the pandemic has been, however, the huge success of the vaccine roll out in the UK has brought much needed confidence back to the markets and a far greater degree of certainty for the recovery of the UK economy.

A final agreement on BREXIT was reached between the UK and the EU late in 2020 and the transition has been far from plain sailing. ITSA has carried out a survey of its membership of how it has affected their businesses and the outcome of this will be released in the next few weeks.

A positive note relates to forecasts being produced for UK GDP growth in 2021/2 with 2021 expecting to see 5.7% and 2022 5.6% and unemployment reducing to 5.8%. Economists are suggesting that these forecasts may well be exceeded and that the UK economy could see one of the strongest recoveries in Europe.

Year on year comparisons are not necessarily reflective as the market was affected globally by a pandemic that had totally unexpected impact on every aspect of our members businesses.

ITSA Members report sales up by 15% in Q1 of 2021

ITSA members sales were up an average of 15% when compared to the last quarter of 2020 but there were some big differences between each member with the range covering +7% to +25%. With members enjoying a positive book to bill of between 1.04:1 and 1.06:1 over the past two quarters this bodes well for continuing improved revenues. With improved revenues and stronger long term order books our members could well enjoy a significant  boost this year.

Industrial, Broadcast and Distribution all see significant growth

With growth of 23% in Industrial, 20% in Broadcast and 14% in Distribution, three of our most significant markets are fuelling members revenue growth, however, Mil/Aero was flat which was a surprise and it will be interesting to see how this progresses into the rest of the year.

Value Add had a very poor end to 2020 but has really bounced back in Q1 2021 with both Fibre Optic and Coax improving by 16% but Copper Assemblies outstripped this by some way with an increase of 42%, this may be partly project specific.

Both the OEM and the Distribution sectors saw double digit growth of around 15%.

At the end of 2020 members were projecting a Q1 2021 being either flat or a small negative, this has not happened and for the most part all members are in a much better position than expected.

Overall ITSA members have enjoyed and extremely positive start to 2021 and most are projecting a return to 2019 levels by 2022.

With the current estimates of the UK connector market we believe that ITSA members represent 21% of the total market.

UK Manufacturing at a decade high in March

According to figures published by  HIS MARKIT/CIPS UK Manufacturing PMI, the UK manufacturing sector continued to recover in March with a PMI of 58.9, The upturn in the UK manufacturing sector gained further momentum at the end of the first quarter. Output and new orders increased as intake improved from both domestic and overseas markets, however, the sector remained beset by severe supply chain and logistics issues..

Output increased for the tenth consecutive month and at the fastest rate since last November.

Higher output has been linked to improved order intake, the vaccine roll out and the planned removal of lockdown restrictions. New business was a key driver with levels being the highest for over 3 years. This demand is coming from both domestic and overseas customers.

Supply chain issues remained a constraint on UK manufacturers causing disruption of raw material deliveries, production schedules and onward logistics to customers all as a result of COVID 19 restrictions but also disruptions caused by post BREXIT issues at ports, carriers and low stocks.

Most manufacturers maintained a very positive outlook for the year ahead with only 6% expecting some kind of contraction.

Summary

2021 has started very well for all members and if all of the forecasts and projections are right then this year could see a significant recovery in the overall economy and markets. There is, we believe, a tremendous amount of pent up activity and with consumers having spent very little over the past 12 months we should see some significant activity in a number of areas including “Entertainment, Technology i.e. mobile phones, computing, white goods etc” and this could also be fuelled by a lot of people continuing to work remotely.

Investments by members parent companies continue and we have noted that acquisitions are being announced more frequently which is extremely positive.

As an association we continue to grow and enhance our profile and we have already gained another new Associate member in the form of Batten & Allen a component manufacturer.

ITSA 2020 summary press release

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We are pleased to share our latest UK Interconnect market review for 2020 published in What’s New in Electronics.

 

https://www.electronicspecifier.com/news/latest/2020-a-tough-year-for-uk-interconnect-technology