Innovation and Expansion Drives Growth of Global Cable Assembly Market
The worldwide market for cable assemblies continues to grow as new technologies proliferate and reach emerging markets around the world. An upcoming report by Bishop & Associates takes a closer look.
The worldwide market for cable assemblies is growing, expanding by 10.8% to $172 billion in 2018. This double-digit growth marks the second-highest growth year for the cable assembly industry since the 2010 recession recovery, coming in just shy of the 11.0% increase seen in 2017.
2018 was a good year for most major economies. Gross Domestic Producer (GDP) grew 3.1% worldwide. The automotive business, which is a major driver of the global cable assembly market, was down a bit in unit volume production, but the electronic content of each vehicle was up. The telecom/datacom market — another major driver of the global cable assembly market — also grew with infrastructure expansion aimed at supporting new technologies ranging from vehicle-to-everything (V2X) communications to 5G connectivity.
The greatest threats to attaining the forecasted growth in 2019 and beyond include socio-political unrest (particularly in the Middle East, Eastern Europe, and Asia), changes to trading relationships between the major economies of the world (such as tariffs, Brexit, NAFTA, etc.), and financial market turmoil, as the markets adjust to these new realities.
The global cable assembly market is anticipated to grow at a compound annual rate (CAGR) of 5.9% from 2019 to 2024, expanding to a market value of $239 billion. Regional GDP growth, regional market sector performance, and the lack of projected worldwide recessions during this timeframe were the primary drivers for these projections.
Worldwide market share in the cable assembly market is beginning to stabilize; the shift to Asia has slowed and some segments of the global cable assembly market, like the automotive industry, will ultimately stay where the final products are being assembled. However, China will likely retain its status as the world’s manufacturer, as well as the prosperity (and increasing costs) that come with success, and its market share growth will primarily result from its growing home market. As a result, we are projecting a smaller shift in the worldwide market for cable assemblies over this forecast period.
Key Trends Impacting the Cable Assembly Industry
The current economic trends in each region are rooted in long-term issues and situations that will not change in a five-year time span. For example, China is well into an industrial expansion that has brought significant business to its shores, provided significant improvement to standards of living, and awoken the home market to modern goods and services. Another example is found in Europe with its sovereign debt crisis, which will take years to undo. The Conference Board said, “As China, India, Brazil, and others mature from rapid, investment-intensive ‘catch-up’ growth to a more balanced model, the structural ‘speed limits’ of their economies are likely to decline, bringing down global growth despite the recovery in advanced economies.”
The shift of industrial output from the advanced economies to the emerging/developing economies is slowing. Certain industries and their subcontracted businesses (like the automotive industry and cable assemblies) will always remain local, and other industries have finished with whatever business transfers they were going to make between regions. As such, China’s increasing share of the global cable assembly market will largely result from servicing its own home market.
Changing trade practices could also have a positive or negative impact the global cable assembly market.
In addition, the US and Europe/NATO are ramping up military spending to keep up with Russian and Chinese advances in hardware and numbers and conflicts in the Middle East, Eastern Europe, and Asia are all agitating the world order. With Russia and China behind many of these issues, there are concerns about having the necessary deterrent capabilities.
For a more detailed analysis of the world cable assembly market, please visit Bishop & Associates Inc. to obtain the new research report, World Cable Assembly Market 2019, available in late May 2019. This in-depth, 17-chapter report examines the global cable assembly market by region, market sector, and product type, with a close look at trends impacting this market, sales and growth forecasts from 2017-2023; market trends and statistics; related products; regional analysis; and much more.
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