Electronic systems sales in 2009 are predicted to slump by 2% as the worldwide economic recession is taking toll on demand from the related industries.

IC Insight has projected that the global electronic systems markets will fall, with the total shipment value slipping 2% to $1.23 Trillion as compared to $1.26 Trillion in 2008, as reported by CIOL.

The anticipated drop in 2009 will make it the third year of decline. Previously, the declines were observed during the recession in 2001, when sales of electronic systems slumped by 14% and in 2002, which witnessed an additional 4% decline.

In 2009, communications and computer/office equipment segments will probably be the most affected segments, suffering 5% and 3% decline respectively. On the other hand, both consumer and automotive electronics sales will shrink by 1% while the revenue from industrial systems is forecasted to plunge by 2%.

The only major systems to show growth in 2009 will be government/military systems, which are expected to reach $83 Billion, increasing 5% over $79 Billion recorded in 2008. Moreover, in 2008, there would have been a rise of 4% as a result of higher demand for consumer electronics, PCs and some newly launched communication products (though these factors are no longer favoring the industry).

The primary reason for sales decline is the decreasing demand due to ongoing economic turmoil, which is expected to continue till 2009 summer. As nearly all the industries related to electronic sector are likely to see moderation this year, it will certainly affect the electronic sales. Additionally, electronic system manufacturers are cutting their production as a result of low demand, thereby further limiting the growth.

However, the electronic systems market is expected to bounce back in 2010, with the probable 7% increase in value terms that will take it to the record $1.32 Trillion mark. Also, another 7% rise will follow in 2011, boosting the total dollar value to $1.42 Trillion. The electronic systems sales are likely to increase at a CAGR of about 5% during 2007-2012.

According to a Research Analyst at RNCOS, “The worldwide financial downturn has made the global electronic sector its victim. Thus, the industry players have to wait till 2010 when the market is expected to spring back.”

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