NEW YORK -- Electronic manufacturing services revenues in Europe are forecast to decline 13% this year, according to a new report.

As Top Tier EMS firms move volume programs offshore, competition will heat up for profitable end-markets like aerospace and defense, as regional players with multiple locations duke it out with the NPI centers of the larger companies, according to Reportlinker.com.

Central and Eastern Europe accounted for just under 55% of European EMS revenues in 2008, Reportlinker.com said. This is expected to fall slightly in 2009 as major EMS providers cut production to meet lower demand. The firm forecasts EMS revenues in CEE to decline by 17% during the year. As end demand recovers so will the share the CEE accounts of the EMS market, although the previous double-digit annual growth will reduce to a more pedestrian pace of 5 to 6% from 2010 to 2013. The transfer of production from Western Europe will continue to be an important factor in the region`s growth, in particular in lower-volume, high-mix products. 

Other findings:

• Top Tier firms are opting to compete locally in aerospace, defense, medical, instrumentation, automotive and industrial
• Consolidation will rise as companies are acquired or close due to ever increasing financial pressures, although it is not expected that there will be a mass exodus of companies in the period to 2013.
• One or possibly two of the major Tier 1 EMS companies will merge.
• Mergers between major European EMS providers is also a possibility.

Reportlinker estimates there are some 700 EMS companies in Europe, over 600 of which have a single manufacturing facility and small but long-established customer base.