EL SEGUNDO, CA -- Global electronics manufacturing services revenue will be flat in 2012, the result of lingering economic concerns in Europe and the US, IHS iSuppli says.

Neither the EMS nor original development manufacturing (ODM) segments are projected to do well this year, with EMS revenue forecast to rise just 0.3% to $207.5 billion, and ODM sales forecast to fall 2.3% to $150 billion.

Both markets will show slower growth year-over-year, given the strong first-half 2011 sales, the research firm said. EMS sales were up 10.1% in 2011, while ODM sales fell 1.7%.

The big concern is recession in Europe and the potential for carryover to the US, iSuppli says. EMS companies depend on their OEM customers to drive business; there is little they can do on their own to grow.

China is the other wild card: It makes up more than half the contract manufacturing industry’s aggregate revenues and is expected to see high single-digit growth this year, boosted by smartphones and PCs consumption. China's labor rates continue to rise, however, averaging $2.19 for per worker hour, and rising nearly 15% per year. Nonetheless, iSuppli does not see another region toppling China as the world's low-cost manufacturing center this year.

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