MarketEye: Q1 Sales Down 14% and Bookings 22% Lower Versus Q4

06.02.2009 // Posted by: Michael Schwert // Posted in: Articles, Switches & Relays

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The relay market hit the lowest level recorded by the Cumulus Relay Report and sentiment in the switch market improves.

Total reported sales for all relay types in North America for the first quarter of 2009 were more than 14% less than the previous quarter and 27% less than the same quarter of 2008. Sales units for Q1 2009 totaled were 10% less than units sold in Q4 2008 and 21% fewer than Q1 of last year.

The total booking dollars reported for all relay types in North America for Q1 2009 were less than the previous quarter by over 22%, and lower than Q1 2008’s total bookings by 46%. The first quarter’s book-to-bill ratio for dollars was 0.778. Booking units in Q1 2009 ran 27% below Q4. The second quarter’s book-to-bill ratio for units was 0.791.

The first quarter of 2009 was weaker in total electromechanical dollars and units compared to Q4 and more so for Q1 of 2008. Solid state had significant gains in sales dollars and units compared to the previous quarter but the selling price fell. Compared to the same quarter of last year solid state was slightly lower in dollars and units but up in price. Like electromechanical, total sales dollars, units, and ASP were down compared to Q4 and more so when compared to Q1 of 2008.

Sales Growth By Relay Type

Total booking dollars and units fell sharply, 22% and 27% respectively, from the previous quarter and more so, 46% and 38% correspondingly, compared to the same quarter of last year. Booking price did improve for both types compared to Q4 and solid state improved over Q1 of last year.

Bookings Growth By Relay Type

The graph below shows total quarterly indexed sales and bookings in dollars and units for the reported data. Sales dollars and units were at period highs in Q1 of 2007, fell to a 2007 low in Q4, then set two year lows in Q2 of 2008, and recovered some in Q3. Booking dollars also set a two year low in Q4 of 2007 and have moved up the first three quarters of 2008. Booked units were generally flat from Q1 of 2007 and moved up nicely in Q2 and set a two year high in Q3 of 2007. All measures hit a Relay Report low, since Q1 2005, in Q4 of last year and again in the first quarter of this year.

The overall selling price set a two year low in Q3 of 2008 then recovered in Q4 and returned to Q3’s level in the first quarter. The booking price recovered from the low set in Q4 is nearly equal to the ASP. Both are trending downward with booking prices coming down at a steeper rate.

Note the price graph above has trends included for the average selling and average booking prices. All of the price graphs will include either linear or polynomial regression analysis to show the trend of prices.

Book-to-bill dollars and units fell for a second consecutive quarter and both are just below 0.80. The ratio of average booking to selling prices ended its three quarter decline sits just below 1.0.

Switch Market Conditions Summary

The March survey of the switch market shows all measures back in decline. Five of six measures were stronger with expectations for the future the only measure getting softer.

The United States officially entered recession in December of 2007. Our survey has a question asking when the recession may end. This month a 46%, believe it will be in the second half of 2009, 46% think the end is in the first half of 2010, and 8% believe it will extend beyond June of 2010.

The Institute of Supply Management’s PMI for April is 40.1 up nicely from the 36.3 in March, a fourth move higher from the low of 32.9 in December. The PMI has been below 50 for the past nine months. Miscellaneous manufacturing was the only group to show growth of 18 manufacturing segments reported. The new order rate in April was 47.2 up significantly from last months 41.2 and approaching 50.0.

The U.S. Census Bureau reported March new orders for durable goods shrank 0.8% after a 3.4% increase in February. Shipments of durable goods declined 1.5% for the eight consecutive monthly loss. The housing market continues to show signs of improvement. The National Association of Realtors reports pending home sales rose 3.2 % in March after a 2.1% increase in February. Pending home sales in March was 1.1% higher than a year ago.

Month over month new orders showed improvement for a third month. Bookings compared to the same month a year ago are at their best level since August of last year.

Sales compared to the prior month remained just below zero with an improving trend. Shipments compared to last year recovered a bit from last month’s low.

The index of current business conditions continues to move up from October lows. Expectations for the future retreated below zero from its best mark since April 2007 in February.

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