TEMPE, AZ – The burdened cost of labor for electronics manufacturing services in the coming quarter is expected to be flat in the US and most geographies.

The exceptions, says analyst Charlie Barnhart, are Mexico (flat to very slightly lower), and Canada, Eastern Europe, Japan, China and Australia (marginally higher). The value of the US dollar against other major currencies is the wild card, Barnhart said.

May and June brought no fundamental change to the underlying burdened cost of labor for electronics manufacturing services, he said. However, the currency translation was generally unfavorable for North American OEMs.

EMS margins in all sectors except automotive are expected to remain “relatively constant” as backlogs and book-to-bill ratios stabilize, Barnhart said. “Some upward fluctuations in mil/aerospace and automotive look likely, as does select downward pressure in communications and medical on perceived strength of an individual OEM’s product offering,” he said.

Lead times are expected to remain relatively flat to slightly down, except with ODMs in China where they have been lengthening, then tick up in the fourth quarter.

Barnhart’s full report is available here (registration required).