improved (adj): made more desirable or valuable or profitable
Is improvement on the horizon? The first quarter of 2021 is now in the books and the ‘current’ new normal is optimistic for growth in 2021 and beyond. In a global survey of CEO’s, 76% expect growth in 2021 versus 10% staying the same and 14% predicting the economy will diminish (PwC 24th Annual Global CEO Survey). As for the United States, GDP forecast for growth in 2021 & 2022 is 6.5% and 3.3% respectively, according to the Federal Open Market Committee.
- We have seen the Dow Jones Industrial Average go past 34,000 and the outlook continues to look promising.
- People are getting vaccinated, going back to work and multiple industries expect a return to more normal activity.
- The Wafer Fab Equipment (WFE) industry has risen from $48b in 2019, to $57b in 2020 and forecasts indicate the market could reach $70b or more in 2021.
- Defense budgets and revenues for defense contractors remain stable. Global defense spending estimates see a rise of ~2.8% in 2021, crossing the $2 trillion mark.
- US Medical Device Manufacturers expect growth of 5% in 2021 and indicate the “Outlook is very positive” (Grandview Research).
- The Energy Sector continues to oscillate. The 2021 oil demand is expected to recover strongly but remain lower than it was at pre-COVID-19 levels—about 4% lower in the base case, and about 7% lower in Rystad Energy’s second-wave scenario. Renewable growth may accelerate in 2021 as the new administration starts to execute on a platform that includes rejoining the Paris Climate Accord, investing $2 trillion in clean energy, and fully decarbonizing the power sector by 2035 in order to achieve a larger goal of net-zero carbon emissions by 2050 (Deloitte 2021 Renewable Energy Outlook).
Here at JEM Electronics, we completed the biggest year in the company’s history and followed that up with the largest Q1 ever. As we are diversified in multiple industries, we continue to build for nearly every market vertical. However, we are all challenged by Supply Chain disruption. Covid-19 is not your typical risk event; its scale has eclipsed mostly anything seen before. According to Accenture, 94% of Fortune 1000 companies are seeing supply chain disruptions from Covid-19. 75% of companies have had negative or strongly negative impacts on their businesses.
So, we are not out of the woods just yet. The ‘new normal’ continues to be difficult to define but the US industry continues to learn and evolve. We continue working with our customers to do more with forecasting and preemptive purchasing. We communicate supply chain delays and how it affects our ability to meet our customers’ demands that in turn, meet their customers’ demand. That said, we are very optimistic that 2021 and 2022 will continue to grow. We all look forward to an improved economy.
We have room to grow. Let us know if we can help you. We very much appreciate our customers’ business and look forward to continuing to serve them.
Andrew F. Dengos
Vice President, Sales, Marketing & Account Management
JEM Electronics, Inc.