ITSA members report sales 11% up over Q4 2024 and up 7% on the same quarter in 2024.
The order intake in Q1 of 2025 was the second highest since Q2 of 2022.
There were some significant variations in market performance:
- Mass transport up 71% (linked to key rolling stock & infrastructure projects)
- Data processing saw a jump of 52% (on key datacentre projects).
- Mil/aero up 24% (a significant increase over 2024 and was the highest revenue level since the end of 2023)
- Medical up 9%
- Communication down 9%
- Test & measurement down 14% (now falling for two consecutive quarters)
- Broadcast down 16% (against a backdrop of significant spend in 2024).
Looking at the Q1 2025 performance results of its members, ITSA noted that the interconnect sector initially appeared resilient. Revenues increased by 11%, the book-to-bill ratio stood at a positive 1.10:1, and overall market conditions remained stable. However, these figures did not yet reflect the global disruption caused by the imposition of significant tariffs in early April, which have shaken international markets.
A marked rise in defence spending had already become apparent, driven by the ongoing conflict in Ukraine and tensions elsewhere. This uptick was likely also influenced by anticipatory procurement, with expectations growing that Europe may need to become more self-reliant and reduce its dependency on the United States.
ITSA indicated that Q2 2025 would likely provide a more accurate picture of future conditions. Members had adopted a notably cautious outlook. At the close of 2024, the association had projected flat or low single-digit growth in the UK connector market for 2025. However, in light of recent geopolitical and economic developments, a contraction in the market could no longer be ruled out. This outlook would be reassessed over the coming six months.
The unpredictable nature of US tariff policy – with rates varying between 10, 25, 145%, or exemptions – continued to drive global uncertainty. In the UK, this uncertainty was compounded by increases in the minimum wage and National Insurance contributions, along with a stagnant economy. These factors were expected to negatively impact business, even if only in the short term.
In response, companies had begun revisiting their supply chains to mitigate some of the disruption, though such efforts required time and delicate negotiation. As reported at the end of 2024, a strong pipeline of RFPs carried over into 2025 had contributed to the robust Q1 performance. With a continued positive book-to-bill ratio, ITSA observed some tentative signs of resilience within the sector.
Download a full copy of the ITSA report here.
