Prevailing economic winds seem to dictate otherwise, but bullish researchers are predicting robust global growth this year for the electronic equipment market driven by strength in the data processing and wireless communications markets.
It's not that the electronics industry is immune to pressures building up in the U.S. economy, where troubles in the real estate and financial markets helped push up the unemployment rate to 5 percent in December, a two-year high.
In fact, observers say the electronic sector is becoming increasingly exposed to events within the larger manufacturing and service economies due to increased adoption of electronic systems to boost productivity.
Still, total worldwide electronics equipment revenue is forecast to rise 7 percent in 2008, to $1.6 trillion, beating the 6.8 percent growth rate recorded in 2007 when revenue rose to $1.49 trillion, according to research company iSuppli Corp., (El Segundo, Calif.)
In the semiconductor sector, although most forecasts call for flat to slightly higher sales growth in 2008, the microprocessor market is seen expanding strongly on surging notebook shipments, according to Doug Freedman of American Technology Research.
Freedman expects MPU unit growth of 11 to 13 percent in 2008, and forecasts notebook unit sales will surge 25 percent from the 2007 levels to a possible high of 155 million units.
"Notebook growth should continue to drive overall solid results for PC supply chain companies as the transition crosses over the 50 percent barrier as a percentage of units in late 2008," Freedman said in a research report.
"We believe lower memory prices enable OEMs to enter lower-priced segments of the market with stronger performing PCs, along with providing the flexibility to continue adding content to the above-$1,000 notebook unit without increasing average selling prices," he added.
'Pockets of weakness'
It's hard to match the optimism with other data from the larger economy. Recession fears grew over the last few days as the latest unemployment numbers point to growing weakness in the U.S.
David Rosenberg, an economist with Merrill Lynch & Co. Inc., is convinced the U.S. economy already slid into a recession late in 2007, an assessment already offered by Bill Gross, manager of Pacific Investment Management Co., the world's biggest bond fund PIMCO Fund.
Last week's "employment report strongly suggests that an official recession has arrived," Rosenberg said. He expects the downturn to last about 10 months ending sometime in the fourth quarter.
Technology analysts say the weakness noticed by economists is already creeping into the electronics industry.