Industry sales declined -6.5% in 2Q15 and -2.6% in 1Q15. Halfway through 2015, sales are -4.6%.

The following table shows industry sales by quarter for 2013, 2014 and 2015. The third and fourth quarters of 2015 are noted in red and represent our forecast for the remainder of 2015. You will note we predict a sequential improvement in the third quarter, but a year over year decline of -4.5%. We project sequential growth in the fourth quarter and year over year growth of 1.1%. We believe that the full-year 2015 will result in a sales decline of -3.2%.

Connector Industry Quarterly Sales and Forecast 2013, 2014, and 2015

 

 

The following table provides our 2015 forecast by geographic region.
 


As previously noted, we predict some moderate improvement in the second half of 2015. However, we see nothing in the immediate future that suggests there will be a substantial upturn in connector demand. All in all, 2015 will be a year resulting in a small decline in connector sales. At best, we believe 2015 will be flat.

Currency Impact on Regional Industry Growth

The euro and yen have declined sharply to the US dollar in recent months. The Chinese yuan has also declined to the dollar, but only modestly.

The following table measures the decline for the first six months of 2015 versus the same period in 2014.

 

One Local Currency to One USD YTD June 2015 versus YTD June 2014

Europe, China and Japan account for 60.0% of world connector sales. As a result, currency fluctuation to the US dollar is having a significant impact on our reporting of sales performance in US dollars.

The following table shows year to date June sales performance by region in US dollars and local currencies.

 

Industry Sales Performance YTD June 2015 USD-vs-Local Currencies

The three significant changes are:

  • Europe is down -12.8% in US$ but up +7.1% in euros
  • Japan is down -9.5% in US$, but up +6.0% in yen.
  • World connector sales are down -4.6% in US$, but up +2.1% in local currencies.

In effect, the industry shipped more connectors through June 2015 than in the same period in 2014. However, a modest +2.1% increase in local currencies is not particularly encouraging with the overall sales trend moving downward.

Historically, the second half of the year generates more sales than the first half. As noted in this issue of the Bishop Report, we are forecasting a modest improvement in the second half. We now believe industry sales will be down -3.2% in US dollars and up approximately +2.0% in local currencies.

Ronald E. Bishop


Ronald E. Bishop

Ronald E. Bishop founded Bishop & Associates Inc., a market research firm that specializes in the world electronic connector industry, in 1985. The firm publishes a monthly newsletter titled “The Bishop Report,” and the twice-monthly digital publication Connector Supplier.

The reports, produced by a staff of 20 researchers, focus on geographic regions, end-user equipment markets, connector products, and interconnect technologies.

The firm also provides executive placement services and conducts multi-client studies and customer surveys, and assists in merger and acquisition activity.

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