by Ron Bishop|
The connector industry has been resilient. Last year, when the pandemic was far from over, we predicted that global economies would recover slowly during the second half of the 2020s and that it would probably take as long as 2021 to reach pre-crisis levels.
However, in the third quarter of 2020, industrial production, after a slump in the first part of the year, recovered very strongly, returning to pre-pandemic 2019 levels by the end of the year. Against this backdrop, the connector industry ended up being more resilient than initially thought. Instead of seeing a long, drawn-out recovery, we saw a V-shaped upswing, which saw global connector sales break all records in Q4 2020.
Bearing in mind that the recovery will not be uniform by geographical region, country or market sector, we must nevertheless record that the connector sector in this first half of the year is still showing encouraging results.
In April, orders increased by 71.5%, the largest year-on-year increase ever recorded in the industry, while sales in the same month increased by 43.4%, also likely an industry record. Of course, much of this increase is directly related to the pent-up demand created by the Covid-19 pandemic and business closures, but based on these early results, the second quarter of 2021 is likely to bring a new record for bookings and invoicing.
The second quarter of 2020 resulted in a drop in orders of -19.4% and a drop in sales of -17.2%: the comparison with the second quarter of 2021 is therefore rather obvious: orders increased significantly.
Due to the large drop in May 2020, we are also optimistic that the results for May and June will also be very strong. We also expect the third and fourth quarters of 2021 to generate strong demand, although the second half of 2020 was the beginning of a reversal in demand for connectivity, and year-on-year comparisons will not be so easy.
Forecasts for 2021
Historically, from 2008 to 2020, the first four months account for about 32% of the entire year's sales. The industry reported connector sales of $19,061m in Q1 2021 and $5,908m in April. Since the beginning of the year, sales total 24,969 million. Assuming historical averages hold, the industry is expected to invest $78,104 million in connectors over 2021: that would be a 24.5% increase over 2020 sales, $15,377 million more than last year's $62,727 million.
Historically, therefore, it is possible for the sector to achieve a growth rate of +24.5%, but we consider it more likely that the increase will be around 15%. We have to take into account that comparisons in the second half of the year will be more difficult and that the future economic scenario is still uncertain. However, it is important to remember the sales figure for April, which increased by 28%. It could easily be argued that our current forecast is too cautious and considers the industry's sales potential for 2021 to be on the low side. It will be necessary to continue to look at the numbers on a month-by-month basis to be as accurate as possible. analysis and forecast as accurate as possible.
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