ATLANTA – The electronic component sales sentiment rose to 103.4 in July, 4.5 points higher than June and an encouraging sign of positivity entering the second half of the year, ECIA reported in its monthly ECIA's Electronic Component Sales Trend survey.

Looking toward August, survey respondents set expectations for an accelerating recovery in sentiment up to a 112.7 index score. While the survey often projects a stronger improvement than is achieved, any level of continued upward improvement in the market would be a valuable indicator of continued positive momentum.

Semiconductors delivered the strongest increase in its rating with a jump of 9.6 points to top 106 and expectations of continued improvement looking toward August with an index score of nearly 117. Electro-mechanical/Interconnect components, which sustained a positive reading above 100 in June, showed a slight improvement of 3.4 points in July. Expectations for the August index measurement come in above 110. The index score for passive components was essentially flat between June and July as this segment remained in negative sentiment territory.

All three Passive components segments are struggling equally with scores between 97 and 100. On the bright side, passive component sales sentiment is projected to improve the most in August with an improvement of over 13 points. This hopeful start to the second half of 2024 should be sustained through Q3 based on the outlook from the last quarterly survey. The Q3 outlook in the last quarterly survey shows 53% of participants projecting growth in Q3 with 18% expecting growth between 3% and 5%. All three product categories are forecast to deliver index scores above 110 in August.

In a reversal of typical patterns, manufacturer representatives delivered average scores in the overall product index that are aligned with the overall average and only slightly behind the scores from distributors. The most surprising survey result between the three groups is the strong optimism of the manufacturer representatives with an average index score forecast of over 125 for August. At the same time, manufacturers and distributors remain cautious with average scores only slightly above 100.

In a concerning development, the index score for the overall end-market for electronic components fell to 100 in July and is forecast to continue its fall with a forecast of 95.5 in August. After flying high in the first half of year with high index scores, the industrial electronics market fell back to Earth in July as it delivered a score just slightly above 100. While avionics/military/space scores continue to measure strong positive sentiment, the scores have been falling for three months following the high achieved in April and are expected to continue to slide in August.

With the exception of these two market segments, every other market delivers index scores just above 90. (Telecom mobile phones scores below 85 in July.) The most encouraging development is the positive momentum that is being built in automotive electronics. It delivered a strong improvement in its score, achieving 96.1 in July and is expected to push up to 105.9 in August.