Economy begins to show impact on distribution

Numbers out of Europe this week show that economic concerns, like those here in the United States, are, indeed, having an impact on the electronics supply chain.

IDEA (the International Distribution of Electronics Association) has reported that European DTAM (distribution total available market) saw 3.8% sequential growth in Q1, below expectations. Year over year, the growth showed a 9% decline. As EDN’s UK-based sister publication Electronics Weekly points out, “this brings little joy to the market.”

According to Silvio Baronchelli, president of IDEA, “Q1 has historically been the leading growth quarter in Europe, however global economic forecasts suggest that overall economic activity is likely to decline, which may impact electronic component markets and restrict growth in 2008.”

IDEA reported that Q1 new orders for semiconductors in Europe fell by 12% compared to Q1 2007.

At EDS, just three weeks ago, some of the industry’s top execs and market watchers noted that distribution is not in a downturn, as proved by the DTAM 3.8% quarter over quarter growth out of Europe, and that the tech industry is not facing another bubble burst-like recession. However, these top execs and market watchers were also careful to state that anything is possible when it comes to the economy’s impact and that impact’s influence on distribution.

What do you think? Share your thoughts on the struggling US economy’s and overall global economy’s impact on the distribution market and electronics supply chain below.