High Confidence: Switch Markets Show Strong Improvement in Q2 Survey
07/26/2021 //
As Q2 began, a survey of the switch market showed all six measures improving or neutral. Only one measure is softer than the previous month.
Switch Market Conditions Summary
|
|
Direction |
Change Versus |
New orders last month vs. previous month |
0.000 |
Neutral |
Softer |
New orders last month vs. same month last year |
1.429 |
Improving |
Unchanged |
Shipments last month vs. previous month |
1.000 |
Improving |
Stronger |
Shipments last month vs. same month last year |
1.143 |
Improving |
Stronger |
Current business conditions |
1.143 |
Improving |
Stronger |
Expected business conditions in 6 months |
1.143 |
Improving |
Stronger |
The Institute of Supply Management’s manufacturing PMI for May was 61.2, up from 60.7 in April. New orders were 67.0 increasing from 64.3 the previous month. The employment index was 50.9 down from 55.1 in April. The Price Index was 88.0, slipping from 89.6 the previous month. Sixteen of 18 industry segments reported growth in March, with significant switch users in the Computer and Electronic Products; Machinery; and Electrical Equipment, Appliances and Components segments.
New orders for manufactured durable goods in April decreased 1.3 percent, the U.S. Census Bureau announced. This decrease, down following eleven consecutive monthly increases, followed a 1.3 percent March increase. Excluding transportation, new orders increased 1.0 percent. The Bureau of Labor reports 559,000 jobs were added in May and the unemployment rate was 5.8 percent..
Month-over-month new orders fell back to neutral. New orders compared to the previous year remained at a two-year high.
Significantly, month-over-month and year-over-year sales both set two-year highs:
Current business conditions and expectations for the future both also reached a new two-year high:
A survey question concerning a forecast for the 2021 North American switch market yielded the following results:
Percent Change |
Percent of Respondents |
Previous Month |
Up >5% |
43% |
14% |
Up 1-5% |
43% |
43% |
Unchanged |
0% |
0% |
Down 1-%5 |
0% |
14% |
Down >5% |
14% |
29% |
Potential Impacts on the Switch Market
Quick resolution of the Covid-19 pandemic was the most frequent response for potential positive impacts on the market. The rebuilding of infrastructure, capital and military spending and a weakening dollar were also mentioned.
Survey respondents said their biggest potential negative impacts on the switch market include a prolonged impact of the Covid-19 pandemic was the biggest concern for the switch market. The expansion of touch screen, voice recognition, sensors and a strengthening dollar were also mentioned as negatives for the switch market.
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Michael Schwert
Michael is the founder of Cumulus, Inc. He has more than 30 years of marketing and sales as well as design experience in the electronic and electrical component industry. Prior to founding Cumulus, he was Director of Marketing for Cherry Electrical Products and held other marketing management positions with Panduit, BRK Electronics, and Ideal Industries.
Cumulus provides market information and consulting services for the global electronic components industry. The company offers three publications: Switch Tracks, a quarterly report with market information on component switches; the Relay Report, a quarterly report with market information on component relays; and Market Notes, a monthly report on sales, bookings, and business conditions in the relay and switch market. Cumulus also manages projects that help leading global suppliers in the relay and switch industry to develop new products and reach new markets.
Schwert provides MarketEYE with monthly articles that include timely and accurate market information for the electromechanical component sector of the electronics industry.