Suppliers of broadcast and media technology products and services are still very confident about the short and medium term future, according to last quarter's IABM Trends Survey. However, compared to the previous survey there is a note or two of caution being sounded, with the weak dollar causing problems for European manufacturers.
Those showing increased confidence for the next quarter outnumber those showing reduced confidence by 4:1. This increases to 6:1 for the year ahead compared to the previous year. Despite this buoyant feeling, however, the ratios have softened noticeably from the previous survey.
Survey respondents indicated a weakening of export orders in Western Europe, although more than 40% said order books were as expected with the remainder split equally, indicating orders better or worse than expected. In the previous quarter, those seeing better than expected orders outnumbered those seeing fewer orders by more than 2:1.
The IABM is the trade association which represents broadcast and media technology suppliers worldwide. CEO Roger Crumpton explained: "Project deferrals and the dollar exchange rate are impacting the sector. European manufacturers are finding it tougher in US dollar denominated markets and this is beginning to show through in order books. It will take a while before recent currency movements work through the entire supply chain"
Selling prices remained constant over the last quarter with 75% of participants reporting no increase or decrease. Costs are creeping up slightly faster than expected but margins overall seem to be reasonably robust.
When it comes to fulfilling orders, skills and staff, and supply chain issues were cited as two of the most limiting factors, with manufacturing capacity coming in as the most significant-more than 40% of the sample cited this as a reason for not fulfilling orders. This reflects a sector and supply chain which has been growing fast and running at close to capacity over recent months.
On the personnel front, 41% of participants said they expect to hire staff in the next quarter compared to 3% who indicated a likely reduction in staff levels. Again this is positive but a reduction compared to the previous quarter and reflects slightly increased caution and difficulty in finding suitably qualified staff.
Finally, companies are clearly investing for the future with 63% saying they are spending more on R&D now compared with a year ago with 48% indicating they believe they will spend more in 12 months time than at present.
Analysts at Ernst and Young undertake the survey for the IABM with responses from more than 60 companies around the world, making it the most comprehensive of its kind. Participating companies receive a full survey data set and the associated trend information.