No growth in 2025 for disties in UK and Ireland

Price pressure caused by stock surplus to impact the channel

While everyone is bracing themselves for the new year, Electronic Components Supply Network’s (ecsn) latest forecast has announced flat growth for disties in the UKI in 2025.

The culprit? The price pressure caused by the excess of stock in the supply chain, as well as the surplus of in-house inventory.

Unpredictable customer needs will also play their part in the downfall of distribution, as “it is impossible to understand what is going in with customer demand,” according to Aubrey Dunsford, market analyst for ecsn.

The market for authorised distributors, dominated by semiconductors, is expected to be £1.447bn, the same as 2024.

This follows a 19.7 per cent collapse in 2024 due to excess inventory, despite shipments for PCs and tablets increasing by 3.8 per cent this year, according to IDC.

“Things will slowly improve in 2025, with a median forecast of zero per cent,” Dunsford said.

“If we come out of 2025 as flat on 2024 it won’t have been a bad year.”

This comes from a falling book to bill ratio with billings back to the Covid-19 pandemic’s peak in 2019 and 2020.

“At the end of 2023 the book to bill appeared to have turned so it was looking like it would pick up, but it didn’t, it hit the bottom in January 2024,” added Dunsford.

The mountains of stock will keep gathering dust, as the trend line hasn’t gone back above one yet.

The lack of growth impacting Q1 FY25 will impact “virtually” the full year, as it will be very challenging for distributors to go through their stocks.

“What this reflects is the impact of non-cancellable orders,” says Adam Fletcher, chair of ecsn.

“In the UK we didn’t see the overstocking as we had come out of Brexit as we were already overstocked and had been keeping inventory levels high.

“But there is 200 days of finished inventory at manufacturers, that’s not including work in progress, and they are pushing their authorised distributors to take that inventory, and then they try to balance that with customers but the visibility has been lost.”

These predictions do not include manufacturers or the grey market.

The grass wasn’t much greener in the rest of Europe, as the German distribution market experienced a dip of almost 43 per cent in 2024, according to Evertiq.

The semiconductors market was hit the hardest in Germany, as sales fell off by 50 per cent.