2Q17 connector industry sales results were substantially better than 2Q16. Industry sales were up +10.5% in the second quarter versus 2016 which grew +1.5% over 2Q15. The overall results and results by region can be seen in the following tables.
China had the highest second quarter growth, up +18.8% in 2017. Japan had the second highest growth in 2Q17, at +15.9%, due to easy comparisons. All regions had improved growth in the second quarter of 2017 versus the prior year.
Connector Confidence Index
The World Connector Confidence Index (WCCI) was substantially higher in 2Q17 than 2Q16. As can be seen in the following table, the WCCI was as much as 27.8 points lower in 2016.
The following table shows second quarter CCI for the present situation by region of the world. Again, 2017 was rated substantially better than 2016 by as much as 37.9 points.
The future situation, in the next table, shows industry personnel were starting to feel better about the future situation in the second quarter of 2016. This coincided with the industry’s turn. There was only an 18.6-point separation between June 2016 and June 2017.
A price index above 3.000 means industry personnel believe prices have, or will increase. Methodology: Increase a Lot = 5; Increase a Little = 4; Stay the Same = 3; Decline a Little = 2; Decline a Lot = 1.
The price index in April through June 2016 indicated that prices had declined slightly in the last six months and would stabilize during the next six months. In April through June 2017, the price index indicated that prices had increased slightly in the last six months, and would continue to increase in the next six months. 2017 has a more favorable outlook for the connector industry on pricing.
Order Lead Times
As can be seen in the following table, order lead times have increased from 5.1 weeks in June 2016 to 5.9 weeks in June 2017. 2017 lead times are currently seen at 5.9 weeks by 36% of the respondents. 62% of respondents expect lead times to be 6.0 weeks or higher six months from now.
Bishop & Associates’ Comments
The second quarter of 2016 was a transition period when the connector industry started growing again. The following are some observations for the remainder of 2017:
- The high year-over-year sales growth in 2Q17 is still partially the result of easy comparisons, but it shows the strength of the market to have a second consecutive quarter, of double-digit growth. Although we expect year-over-year results to be in the single digits for the third and fourth quarters, we expect the sequential growth to remain positive. We expect the market to grow +7.1% in 2017 to a market value of $58,016 million
- We expect the world connector confidence index to remain relatively high for the remainder of the year, meaning greater than or equal to 80
- We expect prices to remain relatively stable, around the current level, to slightly up
- We expect lead times to remain relatively stable, around the six-week mark