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.”