Tough Times Seen For Contract Manufacturers

Contract manufacturing businesses are not immune to the economic slowdown. According to the latest updates of a market research study by iSuppli, this part of the electronics industry is looking at an almost 10-percent drop in business during 2009. The market researcher's latest projections for global contract manufacturing revenues, which consist of sales by electronic manufacturing services (EMS) and original design manufacturing (ODM) providers, are expected to decrease by 9.9 percent during 2009, with revenues of $270.8 billion, compared to $300.7 billion in 2008. The previous iSuppli forecast for 2009 projected 2.2-percent growth for the 2009.

According to Adam Pick, Principal Analyst for EMS/ODM for iSuppli, "This marks the third significant cut to our forecast during the past 24 months. The recessionary ripple has compounded the pre-existing conditions that already pressured the manufacturing value chain." He predicts that global contract manufacturing revenue will rise at a compound annual growth rate (CAGR) of only 1.3 percent from 2006 though 2012, down from the previous outlook of a 5.3 percent increase.

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