Strong Growth Forecast For Contract Manufacturing Services

Compiled ByDave Schafer The contract manufacturing-services industry will continue to grow, consulting firm IDC forecasts, with the worldwide market rising from $103 billion in 2000 to $231 billion in 2005. IDC attributes the growth to the increased scope of these services. "The contract manufacturing-services industry has significantly evolved in the last decade," says Kevin Kane, manager of IDC's Contract Manufacturing Services research program. "The industry has moved from being one-stop shops to providing services for almost every aspect of the manufacturing supply chain. "Today, the ultimate goal of a contract manufacturing vendor is to become a critical partner of a branded system vendor, and providing additional services helps to further integrate the contract-manufacturing vendor into a branded vendor's business." The computer and telecommunications sectors of the IT industry represented the largest opportunity for contract manufacturing services in 2000, according to IDC. Together they accounted for 46% of industry revenue. But IDC says the IT marketplace has changed dramatically since, and the Framingham, Mass.-based firm expects industry revenue will become more evenly distributed among all IT sectors by 2005. North and South America represent the largest geographical opportunity for contract manufacturing services, IDC says. Through 2005 they will account for more than 55% of the market's revenue.