> Electronics Edge Bulletin – Recapping 2024

2024 proved to be a challenging year for the ERA membership, with survey participants indicating sales declined Y/Y in each of the past 12 months, with sales declines noted between ~2 and 7 percent each month. All markets contributed to the weakness, excluding the aerospace and defense industry with notable weakness around consumer-centric markets throughout the year. Inventory levels are likely to blame as lead times remain short and survey participants indicating that suppliers, distributors and customers remained over-inventoried. While the year was certainly challenging across all metrics, it is encouraging that as the year closed, December marked the 4^th consecutive month of Y/Y bookings growth, but with lead times low, the ability to grow backlog remains elusive.

The ERA survey aligns well with broader macroeconomic indicators in the U.S. (ERA survey ~85 percent weighed to North America). Starting with manufacturing, broadly manufacturing was flattish in 2024, with PMI largely remaining a touch below 50, or in the mild contraction range globally. The SAAR (Seasonally Adjusted Annual Rate) for U.S. automotive sales was 16.3 million, which surprised to the upside as OEMs returned with promotions through November and December to drive sales. The ADM markets continued to show long-term secular growth and the medical industries were more mixed as favorable demographics were offset by reduced capex in bigger ticket projects following a post-COVID spending spree. Turning the page into 2025, the industry appears braced for more of the same. While clearly the new administration is supportive of pro-growth/less regulation, these initiatives are often discussed with the pending treats of tariffs and the potential impact to the industry.

2024 reminded us of a relatively “normal” year for our industry, at least regarding the POS data. We observed a notable increase in POS in March 2024, aligning with longstanding trends we’ve tracked over the past 10-15 years—apart from the disruptions during the COVID-19 years.

Overall, the year unfolded per usual with steady growth from Q1-Q3 (October). However, in Q4, the POS performance followed its expected seasonal pattern, with a sharp decrease in October to November—falling over 15 percent. We thankfully saw a slight rebound in December, and this recovery extending into January 2025. January 2024 compared to January 2025 showed us nearly 12 percent growth.

As for inventory, we’re finally seeing the trend line converge with POS by decreasing in volume throughout the channel, which is encouraging. In October 2024, our inventory metrics aligned with POS figures for the first time since September 2022. As we move into early 2025, this synchronization between inventory and POS performance suggests we’re on track for a stable and effectively managed channel to start the year.