The European electronics market had what many have described as a “difficult” 2019 with only single digit growth, while the UK market fared marginally better. One of the many sectors that make up the UK marketplace, the connector industry, saw modest growth by the end of the year after a poor first half.
The first two quarters of 2019 saw connector revenues decline reflecting the weakness of the global economy and the high levels of uncertainty caused by Brexit. This is according to the ITSA (Interconnect Technology Suppliers Association).
“It was also a reflection of UK companies adjusting their component inventories which many had built-up as a contingency against the possible consequences of Brexit,” says John Biggs, Chairman of ITSA. “In the second half of 2019, the UK connector sector stabilised as confidence returned to the market and key infrastructure projects were released. Against this backdrop our member companies saw a revenue growth of 5 per cent over 2018 and enjoyed the highest revenue year since 2014. A key driver of this growth has been the increase in the distribution revenue stream which increased by 13 per cent and now accounts for 37 per cent of ITSA UK revenues.”
Key market performance
There are several key markets for ITSA members including MIL/Aerospace, mass transportation and communications and these continue to perform in different ways. During last year, MIL/Aerospace showed a 5 per cent decrease at component level but this was more than offset by an increase in Value Add. Despite project deferrals and Government cutbacks, this sector has continued to grow and remains a long-term focus for ITSA members.
The communications market has shown a gradual decline in revenues at component level as more and more companies focus on offering Value Add solutions. This can be seen clearly with members reporting an overall increase of 36 per cent over 2018 but with 2019 posting the highest revenue level for Value Add since the formation of the association. Clear winners here are Fibre Optics which posted a 63 per cent increase and RF which grew by 31 per cent.
The mass transportation market has also grown significantly over the past five years and although members saw flat revenues in 2019 this is a very project driven market and revenue trends will continue to fluctuate.
All the above should have meant a positive 2019, however, bookings remained very weak and posted three consecutive quarters of negative book to bill ending the year at 0.93:1. This is again a reflection of organisation adjusting their demand and inventories in line with the market uncertainty.
The level of contraction being seen by ITSA members reflects well against the overall trend in UK manufacturing which has reportedly posted its weakest year for seven years.
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.
Why do members belong to ITSA? Market conditions and dynamics are extremely important to companies and will affect their choice of markets served as well as how they go to those markets. The sharing of non-confidential data is an important part of ITSA’s mission and members consider this to be a very useful status check on their own experience.
The Association’s quarterly statistics and commentary provide members with accurate and prompt quarterly summaries on the status of the UK connector market. This allows members to compare their performance to that of their peer group.
The statistics are also used to help assess the market annually. Members can use these assessments to review their own market development and strategy. Many members use ITSA’s accurate numbers to assess the quality of commercially available and expensive market reports.
Another significant benefit for members are the very competitive membership rates which are fixed as a single annual fee regardless of members revenues.
There are two types of membership – Full and Associate.
Full members are connector manufacturers with manufacturing or sales and support operations in the UK. Associate members are current and potential suppliers of products and services to ITSA’s members.
Current Full members
To find out more go to itsa.org.uk