Q&A: The 2016 Cable Assembly Market
We sat down with Bishop & Associates’ Dave Pheteplace to find out how the cable assembly business is faring worldwide and what he expects to see through the end of the year.
Q: How is the cable assembly market shaping up, growth-wise, for 2016?
A: We do not expect the market to grow very much overall in 2016. There will be pockets of growth in telecom/datacom and automotive. Regionally, we expect to see low single-digit growth in North America, Europe, and China. Low economic growth (or contraction), unstable stock markets, and lower consumer confidence is restraining many consumers (both individuals and business). We expect the overall market to be relatively flat at 1.7% growth year over year.
Q: What market sectors are growth areas for the industry, and what is happening in those markets to increase the demand for cable assemblies?
A: Automotive – despite soft economies, consumers in North America, Europe, and China are still buying cars. In North America and Europe, this is driven by pent-up demand (from the recession and slow wage growth in the recovery) coupled with low interest rates (and relatively cheap car loans/leases). In China, many new consumers were brought into the (car) marketplace over the last 10 years. Having a car is now seen as a right and people are still lining up to get their first one.
Q: What areas of the world are key for growth in the cable assembly market industry? Why will they have an effect?
A: From a population standpoint, China and India have the largest under-served group of people. They need/want everything from appliances to cars to cell phones to internet access, and more. They also want more health services, public transportation, and food (driving medical device companies, aircraft/train manufacturers, and planting/harvesting equipment). The cable assembly industry will have up and down years, but this underlying demand will always produce business.
Q: What trends will we see in technology, products, and sales through the rest of the year?
A: In technology, a key trend is for high-speed cable assemblies. These are used in the infrastructure that services the internet and cell phone systems. High speed is being pushed by the need to handle the tremendous amounts of data going through the internet (which is growing exponentially). Sales will be soft in computer, industrial, and consumer due to cautious consumption by businesses and individuals. The medical market will be soft due to austerity budgets for healthcare. Mil/aero will be soft as spending on the big, expensive systems has been curtailed particularly in North America, and European spending has been very low over recent years due to austerity budgets.
Dave Pheteplace is senior vice president and managing director, cable assembly, at Bishop & Associates Inc. He has more than 30 years of experience in the interconnect industry, including managing divisions of Amphenol, Cinch, and Robinson Nugent.