In addition to the detailed forecasts for each region of the world (North America, Europe, Japan, China, Asia Pacific, and ROW), an industry overview is included which provides current market trends, industry book-to-bill ratios, and outlook narrative.
The worldwide and regional forecasts include: Computers & Peripherals
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 -2.7% which is the smallest measured since 1992.
The following chart displays the business cycles the industry has experienced since 1980.
Since 1980, we have achieved twenty-eight 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-three year compound annual growth (CAGR) is +5.7%. Only once in thirty-three years has the industry had two consecutive years of sales declines (2001-2002).
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 news of all types.
The growth business cycles are clearly visible in the following graph.
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 2019, with growth forecast at +7.5%.
We are forecasting 2014 sales to grow +8.3% to $52,929.7 million. This projected high single digit growth is in line with GDP growth projections by the IMF for the various regions of the world.
World sales are up +9.5% through May. Bishop's forecast +8.3% sales growth for full year 2014 indicates sales demand will soften modestly between now and year end.
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