While bookings increased by 4.2% in Q1 2019 compared to the same period in 2018, billings suffered a 1.3% decline. The association had been looking forward to an unprecedented 15 quarters of sustained growth by the end of 2019 but the total monthly billings (net sales invoiced less credits, scuppered these hopes.
The latest figures show a decline of 16% in April compared to March but the industry was compensated by growth in the semiconductor sector to result in a flat month for the market compared to the same month 2018. (Electronics Weekly reported that this fillip from the semiconductor industry cannot be relied on, as it too is suffering.) Overall bookings declining by 27% in April 2019 compared to March and by 18% compared with April 2018. The book to bill ratio in April fell by 14 points to 0.92:1, fuelling fears of a flattening market for the next quarter.
“This is a disappointing result and well below the Q1 ‘19 billings growth of 5% to 11% forecasted by our members in December last year”, said Adam Fletcher, chairman of the ecsn.
According to Fletcher, the end of the growth pattern has been caused by two factors: customers have been consuming the buffer inventory that they stockpiled in response to March’s Brexit delay and tough market conditions. “As the Brexit date remains fluid, all organisations will have to retain buffer inventory for longer than they expected, which will add significantly to their costs, until the extra inventory is finally consumed,” he warned.
