Germany's electronics industry on Thursday said it expects sales to fall between 1% and 2% this year, boosted by a modest recovery in the second half of the year.

ZVEI president Dietmar Martin told the federation's annual press conference that the industry had also seen sales decline in 2001, despite a relatively strong start to the year.

After ZVEI was forced to revise down its 2001 forecasts several times, the final result was a 1.4% drop in sector sales to 160.4 billion euros.

Expectations of a recovery in the second half of this year are therefore based to a large extent on the low comparable figures of the year-ago period. Total incoming orders to the industry fell 7.4% in January and 6.5% in February from the year-ago periods.

But Martin said that the rate of decline had slowed from the double-digit percentages seen in the last few months of 2001. Incoming orders from abroad in the first two months of this year were down 4% on the year-ago levels.

A rise in foreign demand, positive signals from the semiconductor industry, and an improvement in sentiment could mean that the industry had left the worst behind, Martin said. But considering the ongoing uncertainties over the price of oil and the as yet unresolved wage dispute in Germany's metal industry, the ZVEI president warned against premature optimism.