G English’s MD, Dave English, advises industry to ‘adjust the sails’ to cope with economic headwinds while preparing for new technologies that will drive future growth
In general, 2022 has been very successful for the UK electronics industry. However, we will face significant challenges in the coming year.
Since the impact of Covid the industry has adjusted to cope with supply chain shortages and high shipping costs. Although lead-times are returning to previously expected levels, there are now potentially much bigger problems to consider. The world is entering a different phase. The global economic crisis, combined with war in Ukraine and potential instability in Asia, have far reaching consequences.
Covid will remain in the background for some time but hopefully China may begin relaxing its zero Covid policy early 2023.
A deep recession is predicted for the UK which could last well into 2024; energy costs have increased dramatically; and the current inflation level is significant and will impact consumer spending. Interest rates are expected to continue rising to five per cent or more which will be a consideration for business investment. Careful cost controls and inventory management will be essential during this time.
On a positive note, there are many exciting new and emerging technologies that will drive significant growth in the medium to long term, but for now ‘we cannot direct the wind, but we can adjust the sails’.
At Gelec we see these new challenges need careful handling but in the long-term the UK electronics industry has a very bright future and we look forward to being part of it.
www.gelec.co.uk