The exceptions are the US, Mexico and India, where the cost of labor for both assembly and box build was down marginally on improved absorption.
 
The largest increases in the cost of EMS value-added services occurred in Western Europe and China, the firm says. Both these trends are expected to continue through 2008, as a result of the strengthening of the dollar against the euro and yuan, or its weakening against the peso and rupee, according to Barnhart. 
 
The majority of outsourcing continues to chase a diminishing available capacity principally located in the river deltas of China and the non-euro based countries of Central and Eastern Europe. While the industry continues to add capacity, these regions are approaching operational limits because of shortages in qualified human and infrastructural resources, says the firm.
 
The composite business risk indicator fell this reporting period (signifying decreasing risk) in North America, Eastern Europe, Thailand and Australia and rose (increasing risk) in Malaysia, India and China. Mexico, Thailand and Eastern Europe are the best value, lowest risk solutions for high-volume requirements, says Barnhart.
 
Meanwhile, the situation in China continues to deteriorate, and given the high concentration of outsourcing there, the firm advises acceleration of analysis and integration of alternative solutions.