There was probably a small increase in the number of components imported during the past year (we have not yet seen the stats from Customs). However, the strengthening of the rand has kept the increase in turnover of the importing companies in check as their pricing has been under pressure.
The strong rand has also hurt the companies exporting electronic equipment. The value of our currency will continue to have a significant effect on our industry this year.
Component availability is still good and will probably remain so until the growth in the developed world increases from the relatively low levels currently being experienced in most major economies. Imported component prices should remain fairly static unless industrial growth increases or major new applications for components are found. Inventories are at normal levels and are likely to remain so this year.
The issue of the banning of certain hazardous substances from components (particularly lead) will cause problems for the industry this year. The equipment exporting companies are likely to be the most affected by these new rules. The legislation is not uniform in the USA, Europe and the East and the component manufacturers do not have a uniform approach in attempting to comply. There is much confusion that the component importing companies are doing what they can to clear. However, the problems will remain until the manufacturing companies can comply fully. In the meantime, they will have to keep their customers up to date with their progress which some of them are still not doing successfully. How the various authorities involved with this issue will monitor and enforce compliance is still not clear but problems are likely to occur this year.
The component industry is healthy and likely to grow at a modest rate this year. The telecommunications, automotive and security sectors are likely to continue to prosper and any weakening of the rand will give the exporting companies a boost.
ADEC will present the 2005 Electronic Component trade show from 13 to 15 September at the Kyalami Exhibition Centre to allow the exhibiting companies to show their clients and the industry the new products and ideas from the world's leading component manufacturers. An increase in world economic growth, some weakening in the value of the rand and continued good growth in the South African industrial market should see our industry in a stronger position by the time of the ADEC trade show in September.
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