The connector industry set a new sales record in 2022

Connection industry sales volume(2022)

The connection device industry increased +7.8% in 2022, and global sales reached $84.1 billion US dollars. This is a new industry sales record. The following table shows the sales performance in 2022 according to the geographical area.

It is worth noting that North America achieved sales growth better than China in 2022. In fact, North America has performed better than China in the past five years. China may continue to exceed North America in terms of sales growth.

First of all, China's labor costs have risen, creating opportunities for other countries to compete in Western investment.

Secondly, China's "zero -new crown policy" may lead to the closure of some companies.

The effect of currency and inflation

The US dollar strongly strengthened in 2022, reducing the actual growth of the industry. Calculated in the US dollar, the industry has achieved +7.8% of sales growth, but the calculation of local currency has only achieved +2.0% growth. The following table explains this.

Considering that the global inflation rate between 2022 is between 8% and 10%, the industry implements prices in the same range. Measured by the unit, the connectioner industry may not grow.

As of the release, the financial performance of the year in 2022 has not been announced, but we believe that the rise in prices can offset the rise in raw materials and labor costs. Interestingly, we expect that the profitability of the connector in 2022 from good to excellent.

Healthy backlog of Connector in 2023

 The preliminary voltage voltage order in 2023 was $ 22.983 billion or $14.8 billion weeks of sales. In 2021 years, the average sales of our quarterly sales were US $23.202.2 billion. Therefore, we should have enough backlog orders to achieve the flat or low -digit sales in the first quarter.

Please note that Amphenol and TE Connectivity predict that the first quarter of 2023 sales were -2.8% and -2.7%, respectively. Bishop forecast sales growth +0.5%. We believe that the industry may do better than these predictions, because:

The results of Amphenol and TE are usually exceeded expected.

The backlog is enough to grow in the first quarter.

The following shows the predictions of Amphenol, TE and the industry in the first quarter of 2023.

 In the fourth quarter of the connector industry, sales increased +2.0%. This is lower than 2022 +7.8%, which indicates that demand is slowing. In addition, this trend is confirmed that amphenol has achieved +7.0% growth in the fourth quarter, while the whole year is +16.1%, and the fourth quarter of TE achieved +0.6% growth and +9.1% throughout the year. Both strong indicators indicate that the demand is slow.

The forecast of Amphenol and TE's negative growth in the first quarter further proves the economic slowdown.

Consensus is that there will be no serious economic recession.

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