Introduction

The North American switch and relay markets are headed in different directions. The switch market is well ahead of last year in sales dollars and units with stable or increasing prices. The relay market, on the other hand, is down with decreasing prices. The following looks at the year to date and quarter over quarter performance of the North American switch and relay markets

Overall Switch Sales and Booking Trends

Sales for the total North American switch market shows a seasonal pattern over the past years with the best performance registered in the first quarter and 2006 started just that way. Measures then tend to move lower through the rest of the year. This was not the case this year as sales measures moved up in Q2. In Q3 some of this gain was lost, but sales remain well above any quarter of 2005. Year to date switch sales dollars are 8% ahead and bookings are 4% better than last year.

Overall Switch Market Price Trends

For the period chartered below, the average selling price (ASP) was at its peak in the third quarter of 2005 and recovering from a low in the fourth quarter of the previous year, the result of the weakest demand in the past two years. As demand picked up in the first half of 2005, so did selling prices. Despite rising material costs and improved orders selling prices could not maintain the improvement reached in the first three quarters of 2005 and fell about 5% in Q4 and have remained fairly stable this year. Average booking prices (ABP) have faired better than sales reaching and sustaining a two- year high water mark in the fourth quarter of last year.

Performance by Switch Type

The third quarter showed sales dollar declines in all but keylock, tact, and toggle switch types. Units decreased for all types other than a slight increase for tact switches. This increase in tact unit volume drove a mix change that held the overall ASP unchanged despite significant ASP increases for all but rocker switches. When compared to the last quarter, booking dollars were lower in five of eight groups and units decreased in all but DIP switches both finishing about 4% lower in total. Tact switch units fell at a slower rate than other types. Like sales, this created a mix shift that pushed the total ABP lower despite gains in seven of eight switch categories.

Overall Relay Sales and Booking Trends

The graph below shows the total indexed quarterly sales and bookings in dollars and units. Sales and booking dollar measures peaked in the fourth quarter of last year. Sales dollars and units, as well as, booking dollars have declined through the first two quarters of this year while booked units jumped in Q1 then receded the next two quarters. In Q3 booking dollars and units came in lower than sales for the first time in more than a year.

Overall Relay Market Price Trends

For the period chartered below, the average selling price (ASP) index was at its peak in the first quarter of 2005 then stepped down about 5%. It has remained fairly stable except for dip in Q1 and Q3 of this year. The average booking price (ABP) index has been much more volatile over the past seven quarters. Outside of the big jump up in Q4 followed by an even larger move down the next quarter, the ABP trend appears to be slowing its velocity downward. The same seems to be true for the ASP trend.

Relay sales dollars and units increased in all product types when compared to the last quarter. Average selling prices went down for electromechanical components and rose for solid state relays. The total ASP moved down as lower cost relays gained market share. Booking dollars and units decreased in total compared to the last quarter. This was driven by the decreases in the much larger volume electromechanical type. The ABP rose as units fell at a faster rate than dollars.

All sales metrics for the total relay market are down from year to date levels of 2005 and is tied to the performance of the electromechanical type. Solid state relays grew nicely in sales and booking dollars and units while losing ground on price.