Bishop & Associates publishes two connector forecasts each year. Each eight-chapter report provides an in-depth, and detailed forecast of the worldwide connector industry.
In addition to the detailed forecasts for each region of the world (North America, Europe, Japan, China, Asia Pacific, ROW), an industry overview is included which provides current market trends, industry book-to-bill ratios, and outlook narrative
Bishop & Associates publishes two connector forecasts each year. Each eight-chapter report provides an in-depth, and detailed forecast of the worldwide connector Industry. In addition to the detailed forecasts for each region of the world (North America, Europe, Japan, China, Asia Pacific, ROW), an industry overview is included which provides current market trends, industry book-to-bill ratios, and outlook narrative.
Since 1980 the connector industry has experienced four growth business cycles, meaning consecutive years of increases in year-over-year sales. The average growth business cycle in the connector industry is five years. The longest (years without a decline in sales) is eight years (1993-2000).
The downturn of 2011/2012 has somewhat broken the industry mold. The period of growth lasted only 23 months before sales began declining in 4Q11. The downturn, which was over in October 2012, lasted only 12 months. The decline was only -2.6% which is the smallest measured since 1980.
Since 1980, we have achieved twenty-six years of sales increases and six years of sales declines. The average growth cycle lasts five years with two years being the shortest growth cycle and eight years the longest. The industry's thirty-two year compound annual growth (CAGR) is +5.5%. Only once in thirty-two years have we had two consecutive years of sales declining.
In the three industry declines prior to 2001, the years of growth in between the downturns was four, six, and eight years. From the end of the 2001/2 downturn to the beginning of the 2008/9 downturn was 75 months (6.3 years). From the end of the 2008/9 downturn to the beginning of the 2011/12 downturn was 23 months (1.9 years). The decreasing cycle rate may be the result of the increasing inter-dependencies of the world's economies and our 24/7 processing of the news of all types.
Historically we are at the beginning of a fifth growth business cycle that will last another five years on average.
Although nothing is certain, it is likely that the next downturn is three or more years down the road, given no unforeseen regional or worldwide calamities. The economies of the world and their governments have gone (and are going) through a major fiscal correction, which should lead to relatively stable times where the growth rates will, in all likelihood, be more modest than they have been after past industry downturns.
Year-over-year sales growth in the next five years is expected to hit a high in 2018, with growth forecasted at +9.5%.
We are forecasting 2014 sales to grow +6.7%. This projection for moderate growth is in line with GDP growth projections by the IMF for the various regions of the world.
Industry sales growth in the range of +6.7% is a likely result for 2014 given the relatively easy comparison of the very modest growth in 2013. Growth significantly above this level is unlikely as the events needed to drive the higher growth would already need to have begun unfolding to significantly impact the coming year.
The only opening for a significant downside is the unforeseen event, either manmade or from nature, that could substantially disrupt the worldwide economy.
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