Connector Industry Forecast
By Ronald E. Bishop, Bishop & Associates Inc.

Historically, the connector industry goes through business cycles that result in consecutive years of growth before experiencing a downturn. Since 1980, we have had five growth business cycles, including 2010, when a new business cycle started.

Connector Industry Business Cycles

These cycles are clearly visible in the following graph.

Historical Percentage Change in Connector Demand

This data provides some interesting findings:

• Since 1980, the average growth cycle for the connector industry is six years.

• Three of the four cycles produced CAGRs of 9.5% to 10%.

• The highs and lows have been more pronounced in the past 10 years; more volatility.

The strength of the 2010 recovery (sales growth of +28.4%), combined with the strong YTD growth of 9.8% through April 2011, suggests that we may be at the beginning of another up business cycle.

There are some troublesome HEADWINDS:

• High unemployment in the U.S. and Europe

• Heavy government debt, with the potential for defaults in some European countries

• High deficit spending in the U.S. and a stalled budget process in Congress

• Japan’s natural disasters and nuclear reactor problems

• Unrest in the Middle East and Northern Africa

• Housing market mired in recession-like conditions

There are some promising TAILWINDS:

• Historically low interest rates

• Modestly improving worldwide GDPs

• Automotive industry recovery

• Stock market recoveries worldwide

• Double-digit GDP growth in China and India

• Explosive growth in smartphones and tablets

• Increasing demand for bandwidth and speed in our communication systems

Based on current demand for electronics, we are raising our 2011 forecast from a growth of 6.7% to 8.5%. The following table forecasts connector demand by geographic region.

2011 Connector Forecast
By Region

Our 2011 forecast by market sector is shown in the following table. Computer/peripheral and automotive will see growths of 9.8% and 11.1%, respectively.

2010-2011 Connector Forecast
By Market

We believe we are entering another growth cycle. Our five-year outlook is for a compound annual growth
rate of 8%.

2010-2015 Connector Forecast
By Region

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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.