A double-digit drop for equipment.

The financial crisis prompted banks to cut back their lending to corporations and consumers. The resultant economic slowdown is being amplified by spending reductions by companies and families who are building up cash reserves. In effect, potential purchases of electronic equipment have been postponed. Moreover, the large declines in unit deliveries of PCs and cellphones forecast for this year will be accompanied by big price cuts, thereby creating deep double-digit declines for the corresponding revenue streams.

The Computer and Communication sectors will not be the only areas impacted. For example, drops of as much as 50% are forecast for the Semiconductor Manufacturing Equipment sector. Consumer retrenchments will also create double-digit drops in both entertainment and Automotive Electronics. In the latter case, the sharp 2008 U.S. vehicle downturn will spread to the rest of the world during 2009. That is, global car sales, which fell by about 5% in 2008, are slated for a 9% drop in 2009.

Military Electronics is the only major equipment sector expected to post positive growth during 2009. But the only significant gains outside of the U.S. will be in China and Russia. Overall, global electronic equipment production is predicted to fall by a massive 11.9% this year versus a 0.2% gain in 2008. What's more, the recovery will be tepid. Only a 4.6% advance is slated for 2010, followed by a respectable 8.3% gain in 2011.

About Henderson Forecast Summary

The Henderson Forecast Summary is provided free of charge as an industry service by Henderson Ventures, publishers of the Henderson Electronic Market Forecast newsletter.
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