Heard in the Channel: Cautious optimism prevails at EDS

May 15, 2012
A return to steady business has distributors keeping a watchful eye on the economic horizon

Donna Garrett says she’s optimistic about the business outlook for the electronics industry. President of California-based Garrett Electronics, Garrett is keeping a hopeful eye on the economic horizon following a solid start to 2012.

“I’m still optimistic,” Garrett said during an interview at the Electronics Distribution Show (EDS) last week in Las Vegas. “I’m hopeful that the recovery they keep talking about on the news will materialize.”

Distributors large and small echoed Garrett’s sentiments during the three-day show, pointing to the ups and downs of the last couple of years and the return to steady business most are experiencing now.  A host of positive economic signals combined with growing demand for electronic products worldwide had most distribution professionals landing on the side of optimism—albeit the cautious kind.

In a presentation to suppliers and the media, TTI Inc.’s Michael Knight pointed to strong customer forecasts and the steadily increasing Purchasing Manager’s Index (PMI) as indicators of a solid second half of the year. The PMI—published monthly by the Institute for Supply Management and a key indicator of manufacturing growth—registered its 35th straight month of growth in April. Knight—TTI’s senior vice president for the Americas—also pointed to a return to growth in the capacitor market and an anticipated 7% growth rate in interconnect products in 2012 as more positive signals.

“Things are getting better, but they’re getting better slowly,” said Knight, adding that overall, “the electronics industry is still a great place to be.”

Julie Yuan, managing director of California-based distributor Amidon, agrees that slow and steady rules the day in 2012. She says smaller distributors such as Amidon remain focused on efficiency and sticking to their roots—providing in-depth information and maintaining close customer relationships—while navigating the ups and downs of an uncertain economy.

“I think this market has taught everyone to be as efficient as possible,” Yuan said. “Overall, business is okay. April turned out well and May should be okay. Overall, it’s steady.”

Mega-distributor Digi-Key has seen a steady return to “nice day-to-day business growth” as well, according to company president Mark Larson. Digi-Key benefitted from the panic buying following the Japanese Tsunami last March, which bottomed out in the July-August time frame and was followed by slower business conditions toward the end of the year.

With a return to more steady growth, Digi-Key is focused on building its Internet-based model. The distributor marked its first full year without a print catalog this spring—an announcement that took much of the industry by surprise last year.  Larson says the distributor is not looking back on its decision, noting that the negative feedback the company has received since cancelling print is negligible compared to the criticism they received over environmental concerns and other issues for printing such a large book. Coinciding with the anniversary, Digi-Key launched a dynamic catalog this spring—an enhanced version of its online catalog that allows customers to search in real time and link to information sources, including the company’s training programs, videos, technical resources and more.

“We’re not looking back on [the decision to cancel the print catalog]. We think it was the right move from an environmental standpoint as well as a business standpoint,” said Larson. “Now, with our dynamic catalog, we thought it was critical that a person be able to see something more than a pdf.  Like anything on the Web, it is a work in progress, and we’ll continue to make the experience richer for our customers.”

More industry news

Several distributors announced new and enhanced distribution agreements, company highlights, and online expansion:

Newark element14announced a new distribution agreement with Pentair Technical Products to stock the company’s full line of Schroff electronics packaging solutions. Also, Newark element14’s parent company, Premier Farnell, announced a new agreement with Wamco Lighting, which provides lighting and illumination products for a range of applications, including military, aerospace and transportation.

Digi-Keyannounced new distribution agreements with Thomas Research Products and Maxwell Technologies. The distributor will supply TRP’s advanced drivers and power solutions for solid state lighting, and will provide Maxwell’s energy storage and power delivery solutions.

Mouserannounced a global partnership with TDK-Lambda, providing its AC/DC power supplies and DC/DC converters.

In other news, two of the industry’s largest distributors were named to the Fortune 500 list recently. Avnet, Inc. ranked 108th, rising from its spot at number 132 last year. Arrow Electronics also made the list, coming in at number 133, rising from its spot at number 140 in 2011.

Finally, Digi-Key announced the international launch of its TechXchange online communities. Comprised of six communities segmented by technology category--energy harvesting, lighting, microcontroller, power, sensor, and wireless solutions—TechXchange brings industry professionals together to exchange ideas and get expert advice online. The communities are now available on 19 of Digi-Key’s international websites.


And don’t miss these upcoming industry events:

Connectors, Cable Assemblies and Optical Transceivers for High-Speed I/O Applications Up to 150 Gbps
Pre-recorded online QuikCast, presented by TTI, FCI, and Electronic Design
On demand until Aug. 6

ProcureCon 2012
October 15-17, 2012

ECIA Executive Conference
October 28-30, 2012

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About the Author

Victoria Fraza Kickham | Distribution Editor

Victoria Kickham is the distribution editor for Electronic Design magazine, SourceESB and GlobalPurchasing.com, where she covers issues related to the electronics supply chain. Victoria started out as a general assignment reporter for several Boston-area newspapers before joining Industrial Distribution magazine, where she spent 14 years covering industrial markets. She served as ID’s managing editor from 2000 to 2010. Victoria has a bachelor’s degree in English from the University of New Hampshire and a master’s degree in English from Northeastern University.

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