The Electronic Components Industry Association (ECIA) has released its latest Electronic Component Sales Trend (ECST) surveys for August and Q3 2023, which show a positive trend of improving sales sentiment for the electronic component markets. The ECST surveys measure the expectations of sales growth or decline for various component categories and end markets on a monthly and quarterly basis.
According to the ECST August survey, the sales sentiment for overall electronic component markets improved by 7.3 points over July to reach 90.3. This continues a trend of improving results that began in June. The outlook for September calls for the index to maintain this upward trend reaching 94.9. Even though these scores are below the threshold of 100 that divides growing from declining sales sentiment, they are the best scores since February 2023 and an increase of 22.5 points from May 2023.
The improvement in sales sentiment was seen in all three component categories between July and August. Passive Components and Electro-Mechanical / Connector Components both report expectations of continued strong improvement in September reaching 95.5 and 93.2, respectively. Semiconductor expectations for September remain essentially flat at 95.7, the best of all three.
The ECST August survey also reveals a significant gap in reported sales sentiment between manufacturers and manufacturer representatives. Product sales sentiment of manufacturers has come in between 8.1 and 9.9 points higher than the overall average between July and September. On the opposite end, manufacturer representative scores are between 8.0 and 16.2 points below the overall average. This difference emerged in April and could indicate that the distribution channel is still resolving inventory imbalances while manufacturers benefit from direct sales that are more in line with end market demand.
The overall end-market index was relatively stable between May and August. The outlook for the market index predicted a major jump of 15.2 points for August in the July survey, but this did not materialize in August results. Now the jump has been pushed out to September with a leap of 16.5 points predicted. This optimistic outlook is seen across all end markets with every market reporting improving sales sentiment looking toward September. The biggest improvements are expected in Consumer, Industrial, Medical, and Compute Electronics.
The quarterly ECST survey results present a similar picture looking through the end of 2023. A comparison between growth expectations for Q3 2023 and Q4 2023 shows continued optimism for sales growth in both quarters. The share of participants expecting growth in Q3 is 68% followed by continued optimism in Q4 but lower at 51% of participants. Only between 2% and 4% of participants expect a decline of between -1% and -3% in Q3 and Q4. The remaining survey participants expect stable revenues for the second half of 2023.
The ECIA’s Chief Analyst Dale Ford commented on the survey results: “The August sales sentiment for overall electronic component markets improved by 7.3 points over July to reach 90.3. This continues a trend of improving results that began in June. The outlook for September calls for the index to maintain this upward trend reaching 94.9. Hopefully, if the industry can sustain recent improvements, it is possible that sales sentiment for all categories could top 100 sometime in Q4 which would signal the potential for return to broad-based growth at the beginning of 2024.”
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