Up, Down, All Around: First Half 2010 Results and Outlook
By Ronald E. Bishop, Bishop & Associates Inc.

There is nothing about 2009 and 2010 that approximate the definition of “normal business conditions.” In the first half of 2009, bookings were down 36.6 percent, and sales were down 33.9 percent. In June 2010, bookings are up 50.2 percent, and sales are up 37.5 percent. Both years set a historical low and a historical high for the halfway point. 

First Half Results
Year-To-Date Change

In a normal economic business cycle, the electronic connector industry ships more in the second half of the year than in the first half. The average percentage difference in shipments recorded over the past 25 years is 48 percent in the first half of the year, and 52 percent in the second half of the year. Our 2010 forecast assumptions are as follows:

• The second half of 2010 will result in shipments of $21,300 million vs. $21,219 million in the first half. In effect, the second half will be flat compared to the first half, but year-over-year shipments will be up 12.4 percent.

• The third and fourth quarter will be down sequentially, 1.8 percent and 2.8 percent, respectively. Year-over-year growth will be 19 percent in 3Q10, and 6.3 percent in 4Q10.

• For the full-year 2010, sales will be up 23.6 percent. This is an increase from our previous forecast of 18.2 percent for 2010. Full-year 2010 sales will be $42,519 million vs. $34,390 million in 2009. This is an increase in sales of $8,129 million (23.6 percent).

In our opinion, substantial orders and sales will continue in the second half of 2010, but demand will soften. The following provides our outlook by quarter for the second half of 2010. 

Industry Sales by Quarter
Percentage Change

Regional Outlook - 2010
The regional year-over-year growth percentages are unusually high because of the severe downturn in the first half of 2009. The following table provides the year-over-year percentage change in sales at the halfway point in 2010.

 First Half Results
by Geographic Region

The regional percentage numbers will decline in all regions in the second half of 2010, and begin to look more normal. Remember, 3Q09 and 4Q09 provide much tougher year-over-year comparisons.

Our full-year 2010 forecast by region is provided in the following table. 

2010 Forecast by Geographic Region

If you would like to subscribe to the Connector Industry Forecast, go to connectorindustry.com and select “Research Reports.” You may also contact us at bishop@bishopinc.com, or by calling 630.443.2702.