Storm Abroad May Bode Well for U.S.

Technology Forecasters continues to press the idea that something of a perfect storm is brewing offshore, with North American EMS firms positioned to reap the benefits.

In building its case, the research group points to the confluence of China’s rising labor costs and higher book-to-bill, the weak greenback and record oil prices. The weakened dollar alone has negated most gains afforded by lower labor cost  regions. According to TFI’s Charlie Barnhart, “Based on the 100 case studies of sourcing decisions I completed this year, the biggest impact was the exchange rate of the dollar.” That, coupled with higher logistical costs and the stronger yuan, could push OEMs to reconsider where they place orders, TFI says.

That could spell recovery for EMS firms in Mexico and the U.S. this year. Writes TFI: “When all is said and done, the supply chains that are flexible will probably get through the best. Closer to home or closer to end-markets rather than simple
labor costs may become the most important consideration in 2008.”

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About Mike

Mike Buetow is president of the Printed Circuit Engineering Association ( He previously was editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He spent 21 years as vice president and editorial director of UP Media Group, for which he oversaw all editorial and production aspects. He has more than 30 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow