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Global Supplier Group Cites ‘Limited Confidence for Rapid Recovery’

Finds equipment companies to be ‘circumspect’

Broadcast equipment suppliers face more difficult operating conditions right now.

That’s the unsurprising story from IABM, an association made up of TV and radio manufacturers and suppliers based in the United Kingdom.

“With two excellent years in 2007 and 2008, the broadcast and media technology industry is enduring a difficult year in 2009 with limited confidence for a rapid recovery,” the group said, based on its latest survey.

“The industry is naturally affected by a four-year cycle, driven by major television events such as the Olympic Games and the U.S. presidential election, which involve huge capital expenditures on new equipment. The completion of this cycle in 2008, followed immediately by the economic downturn, has led to much more difficult operating conditions for suppliers.”

The survey, conducted in June, found 68% of respondents felt that next quarter will be the same or better than the last quarter, but 43% said confidence for next year is diminished or diminished significantly.

“Looking ahead six months there was a broad spread of opinion: 29% thought things will be improving, 31% that they will be about the same, and 24% saw a continuing deterioration in the situation. …

“The major impact of the credit squeeze is seen in the manufacturers’ own ability to fulfil orders: a year ago only 9% of manufacturers surveyed quoted finance as a constraint on output; today it has quadrupled to 36%. The need to control costs is also likely to show an impact on future innovation, with 17% of manufacturers reducing R & D investment.”

Jonathan Dunn of Ernst & Young, which did the survey, stated in the company’s summary: “Perhaps the most worrying aspect of this survey is that output is being limited by the scarcity of credit and finance. This is indicative of today’s tougher banking environment, and by the predominance of small and medium-sized businesses in the broadcast technology supply chain.”