In spite of a 4Q’06 slowdown in personal computer production (due to a delay in Microsoft Vista and microprocessor shortages in Asia), global electronic equipment demand remained reasonably strong at year-end 2006.
Based upon 3Q’06 financial data from a broad range of companies in the global electronics ‘food chain’, we now have an updated, quantitative picture of 2006 business conditions.
Thanks to higher interest rates and other inflation-controlling efforts the world’s economies appear to be heading toward a ‘soft landing’ in 2007. Barring some global catastrophe no recession is on the horizon – just slower GDP growth.
Electronic equipment growth will still be reasonable in 2006. However rising interest rates and less disposable income (due to higher energy costs) will limit business and consumer spending leading to a slower expansion in 2007 & 2008.
Globally, 2005 was a decent year, driven by consumer devices (cell phones, personal computers and new video games) plus a rebound in the telecom/datacom sector....
As we enter 2006, business conditions remain ‘better’ than previously expected, no doubt benefiting from an overflow of work from full Asian factories....
