BOSTON -- EMS companies expect business to continue to growth across most sectors in the second half of 2018. 

Based on recent earnings reports, top US-based contract manufacturers agree almost every end-market will remain firm through year-end. Here's an overview of the end-markets:

Aerospace/military: Sanmina says revenue from defense will pick up. Celestica is more bullish, anticipating a “strong” increase in the second half. Benchmark forecasts growth in the high teens, while Flex is more muted, reporting a flat to 5% growth forecast. Plexus expects that modest strength in the end-markets and new program ramps will result in a mid-single-digit increase. Ducommun noted demand picking up in commercial aerospace and military hardware.

Automotive: Kimball, which just passed the $1 billion threshold in annual sales during its fourth quarter ended in June, leads the way in forecasting continued demand for automotive. Flex called automotive “relatively stable.”

Computing/Cloud: Celestica predicts enterprise end-market revenue will rise in the mid-single-digits range. Flex expects September quarter computing/enterprise revenue to grow 5% to 10% year-over-year, driven by continued strong growth in cloud data center solutions and year-over-year growth in telecom due to new wins and the beginning of 5G demand. Sanmina also forecasts growth in cloud sales. Benchmark sees revenues from the sector down more than 20% based on customer forecasts after stronger-than-expected demand for enterprise storage products in the second quarter.

Consumer: Flex guided for consumer electronics revenue to be up 10% to 15% year-over-year and is now planning for continued expansion of new programs in emerging markets. It expects its Nike business to show a “significant increase in revenue” through December.

Industrial: Flex’s industrial business unit is coming off a record June quarter for revenue at $1.45 billion. Sales were lower than company expectations. For the September quarter, Flex expects industrial revenue growth to improve by 5% to 10% year-over-year, with new program ramps in home and lifestyle offsetting weakness in capital equipment and energy. Benchmark also expects growth in the high single digits. Others expecting growth are Sanmina, Celestica and Plexus.

Medical: Flex said its medical business had bookings of over $500 million in the June quarter, higher than all of the company’s previous fiscal year, which was also a record bookings year. Plexus anticipates a mid-single-digit revenue increase in the current quarter. Sanmina says revenue from medical will pick up. Kimball was also bullish, citing "good momentum" and "widespread strength" in the sector. 

Networking/Communications: Plexus blew the doors of in the June quarter as its communications sector was up 21% sequentially, well above expectations of a low double-digit increase. Looking ahead, they expect strong demand for the new programs to continue, offset in part by component availability. As a result, it anticipates flat revenue for the quarter and full fiscal year of 2018. Sanmina also said revenue from networking and optical communications will drop in the current quarter. Celestica expects communications revenues to increase in the low single-digits range.

Semiconductor capital equipment: Benchmark sees softness in semiconductor capital equipment, with demand falling 20% or more. Plexus, on the other hand, endured softness in the sector last quarter and now sees a rebound, with “good demand” from many top customers. It is forecasting a high single-digit increase. Celestica also expects a strong pickup in revenue from the semiconductor end-markets.

Updated Aug. 7

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