Electronic Component Sales Slide in April, Signaling Continued Supply Chain Struggles
In a sign that the supply chain restrictions imposed by continued COVID-19 protocols, inflation, and geopolitical tensions such as the war in Ukraine may be having a significant effect on the electronics market, electronic component sales for March and April softened. According to the Electronic Component Sales Trend Survey (ECST) published by ECIA, its sales-trend index fell 16 points in March to 113.6%, and another 7.1 points in April to 106.5%.
Although these figures do point to overall market growth (any figure over 100% indicates positive growth), such steep declines are a cause of concern for market analysts that the market may soon see contractions that would help signal the coming of an economic recession. Consumer confidence, in particular, appears to be extremely low, with the ECIA Chief Analyst Dale Ford citing several risks in some areas of the world, which take a toll on global economic, physical, and emotional health.
“Certainly, there are many impacts being felt ranging from the war on Ukraine by Russia to the continued upward trend in the inflation measurements,” said Ford. “It appears that many respondents in the most recent index were feeling the pressure of these forces.”
The highly restricted supply of MLCCs also appears to be playing a large role in the market decline. Shanghai, a central hub of MLCC manufacturing, remains under total lockdown, and Chinese MLCC suppliers located in Tiajin, Suzhou, Wuxi, and Guangdong face continued delays.
Overall, little has changed in recent months regarding long-term projections. According to ECST, projections for resolving the major supply chain challenges still stretch out into early to mid-2023. This means continued lead time increases. After a brief glimmer of hope in prior surveys, it appears lead time challenges will continue to confront the supply chain for the foreseeable future.