Sager Electronics’ senior vice president marketing, Faris Aruri, provides detailed insight into growth sectors, plus the market purchasing professionals can expect in 2024.
Forecasting next year’s sales growth is always tricky, however identifying growth markets is considerably easier. We have the ultimate tailwind in demand for electronics led by IoT, EVs, robotics, medtech, renewable energy and factory automation, while data centers, AI hardware, and space exploration will be growth markets for years to come.
Regarding the market in general, it will come down to which competing market factors you believe will win out and to what degree. Short-term, we are exiting a compressed bookings cycle—fueled by the supply chain crisis and extended lead-times—that is trying to settle back into some type of normalcy. The most obvious factors are the considerable inventory that exists throughout the channel that will need time to burn off with continuing market demand behind it. We also have a federal reserve that is determined to slow inflation, trying to restrain an economy that does not want to slowdown, a good longer-term problem.
With inventory burning off and continued demand, book- to-bills coming back in line and a pause on interest rates, perhaps by early to mid-second quarter we could normalize and get back on a strong growth path. But that won’t be before a dicey period in the first quarter if the industry- wide oversized sales backlogs are depleted. We might see some flat or negative growth up until May, steadying in the second quarter, and stronger growth by year end, averaging to low single digit growth to close out this five-year period since the onset of Covid-19.