SAN FRANCISCO – Most EMS companies are seeing normal to tepid demand, and the economy remains the top concern, a leading industry analyst said this week.

Major EMS players, including Flextronics, Celestica, Sanmina-SCI and Jabil, are maintaining cautious outlooks, said Sherri Scribner of Deutsche Bank Equity Research, based on the company’s recent tech conference.

“Most companies were unwilling to give a view on when the economy will improve, with most agreeing their visibility on business is currently limited (about 3 months),” Scriber wrote. She singled out Jabil, whose comments suggested the outlook has become incrementally more negative, based on recent negative comments from Nokia, its LCD TV business (Philips), and Europe’s overall economy.

Higher production costs brought about by inflation in oil, logistics, material and labor were also discussed. The EMS companies say these costs will be passed on to customers, but not immediately.

Overall, the market seems headed for hard times. “EMS companies will see increased headwinds in the coming quarters from a larger global slowdown and the potential impact from the strengthening dollar,” Scribner concluded.