The SA market has been very sluggish in 2011, especially in the third quarter.
The global financial crisis has affected our economy, and this has been very noticeable in the electronics industry and specifically in the electronic components market.
After the 2008 declines, the global electronics market rebounded sharply, but this did not really happen here in SA – we had a moderate upturn and now see declining trends. We have also seen a weakening of the Rand, and there are many opinions on whether this is good or bad for our economy. I am not an economist, but in my view a weakening to current levels (R8 = $1) is a good thing. It makes imports more expensive, but in turn helps our customers who export their products. It also makes competing finished goods more expensive, again helping local manufacturers.
With the global upturn seen in the past two years, lead times from most suppliers reached very long delivery times – often reaching 28 to over 40 weeks – making it very difficult to plan production. It gave a boost to grey market imports, with all the problems endemic to this option. But in the past quarter, most lead times have dramatically improved. So with a bit of proper planning, supply can revert to something approaching normality.
There are market sectors that show growth opportunities and that is where we will focus a lot of our effort. This includes sectors such as LED lighting, wireless communications and metering. Also alternative energy offers opportunities to the component market.
In the years I have been in business I have never put too much faith in government or other industry bodies doing anything very effective to stimulate growth. I think it is business and entrepreneurs that cause our market and our economy to grow, often in spite of what government does. We need to continually nurture our relationships with our customers and offer them value in what we add to their business. That is key to continuing to grow.
By nature I am an optimist, so I would like to take an optimistic view for growth opportunities in 2012. If global economic issues do not overwhelm all of us, I will stick to my optimistic view.
For more information contact Albert Kopp, Avnet Kopp, +27 (0)11 809 6100, [email protected], www.avnet.co.za
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