Connector Sales Soar as Post-Pandemic Production Rebounds
Bishop & Associates predicts continuing high demand for connectivity products as OEMs ramp up to meet connector demand in every market.
Despite the incredible challenges of 2020, demand for connectors remained strong across markets. In fact, after the shutdown period of the spring, most companies managed to regain positive footing as OEMs returned to normal or greater business levels by fall. The electronics industry demonstrated great resiliency in its efforts to meet the needs of its customers.
In 2021, we continue to see the effects of the pandemic, first in terms of supply chain disruptions and materials shortages, and now in sharply rebounding demand for a variety of electronic products. Therefore, the outlook for the connector industry this year is very positive. Connector suppliers are responding to customer needs and helping to restore business channels with new products and services.
Connector demand is soaring:
- April orders were up +71.5%. We believe this is the largest year-over-year increase ever recorded in the connector industry.
- April sales were up +43.4%, which is also probably an industry record.
Obviously, much of this increase in connector demand is directly related to pent-up demand created by the COVID-19 pandemic and the shutdown of business activity. Based on early results, the second quarter of 2021 is probably going to result in new records being set for bookings and billings. Consider the following table:
The second quarter of 2020 resulted in orders down -19.4% and sales down -17.2%, which creates very easy comparisons for 2Q21. April orders were up significantly. As noted, because of the significant decline in May of 2020, we are optimistic that May and June results will also be outstanding.
We also expect the third and fourth quarters of 2021 to result in good demand. However, the second half of 2020 was the beginning of the extended period of turnaround in connector demand that we are now experiencing. Therefore, year-over-year comparisons will become more difficult.
Bishop & Associates‘ 2021 Forecast
Historically, 2008 to 2020, the first four months account for 31.97% of full-year sales.
In 2021, the industry had connector sales of $19,061 million in 1Q21 and $5,908 million in April. Year-to-date, sales are $24,969 million. Assuming historical averages hold up, the industry would ship $78,104 million in connectors in 2021. This would be an increase of +24.5% over 2020 sales of $62,727 million.
Historically, it is possible that the industry could achieve a +24.5% growth rate. We believe it is more likely we will achieve growth in the +15.0% range. This is primarily because we have more difficult comparisons in the second half of 2021, and there are many uncertainties going forward.
It is important to remember that current industry sales are up +28.1% through April. One could easily argue that our current forecast is too conservative and may be on the low side of possibilities for industry sales in 2021. We will continue to watch where the monthly numbers go and keep you advised.
No part of this article may be used without the permission of Bishop & Associates Inc. If you would like to receive additional news about the connector industry, register here. You may also contact us at [email protected] or by calling 630.443.2702.
Like to Receive This Information Regularly?
This information appears in Bishop & Associates‘ monthly newsletter, The Bishop Report. Please click the following link if you are interested in receiving more information about The Bishop Report.