UK interconnect companies are reporting no signs of a let up in a booming market. Members of the Interconnect Technology suppliers Association (ITSA) enjoyed Q2 sales levels up as much as 20% y-o-y, adding the caveat that revenue growth slowed slightly compared to Q1.
Bookings are plentiful and continue to perform well. Some ITSA members declared orders up by as much 40%.
Four key sectors – medical, security, data centres and telecom – are driving the market.
ITSA members cited medical as a significant growth area. The slowing of the COVID pandemic has not blunted sales to medical equipment manufacturers. Sales to the defence sector continue to hum along nicely. Sales to test and measurement and industrial have levelled off.
Disappointingly, ITSA members reported a depressed railway market. Sales have slipped 41% compared to Q2 last year as UK rail companies continue to assess the impact of COVID on passenger numbers.
While warning of peaks and troughs, ITSA members remain positive about the final months of 2022. The book to bill ratio stand at a healthy 1.22:1, which they say, will deliver continued sales growth through the rest of this year.
Order books are strong as wary customers place longer-term orders to head off any lead-time issues. Another positive portent is the willingness of ITSA members’ parent companies to invest.
There are clouds on this sunny horizon. Members listed lead times, material availability, labour shortages, higher employment costs, inflation, interest rate rises and political uncertainty as negative influences.
Looking ahead ITSA members’ sentiments suggest 2023 will not be as positive as this year.
ITSA chair, John Biggs comments, “Significant global events have occurred since 2021. In particular, the war in Ukraine and political uncertainty and instability in the UK are having a marked negative impact on all areas of ITSA members business. This coupled with rising utility costs, higher prices on incoming materials, shortages in the semiconductor market, and increased labour costs mean that our members are fighting many battles to manage their business and the growth rates.”
“ITSA members, along with the rest of the UK manufacturing sector, continue to face huge difficulties in recruiting skilled, experienced and qualified people and have started to investigate innovative ways to meet their recruitment needs. ITSA will be producing a separate, special press release on this topic,” he added.