Connector Prices Expected to Deflate About 3% in 2006

Deflation continues to erode prices in the connector market. A 3% drop is predicted in 2006.

Edited from Purchasing.com

The price of connectors will continue to erode in 2006, at a rate of about 3%, according to news posted at Purchasing.com. The estimated deflation in connector prics is less thant the 6%-8% annual declines that have beset the industry as a result of Asian competition. Still, analysts report that athe greatest amount of price erosion and the greatest amount of revenue growth is in the Chinese connector industry. Revenue growth for connectors in China will rise about 20% in 2006 depsite double-digit annual price erosion for connectors sold.

Two other factors contributing to the continued drop in prices are: the growing purchasing power of some large electornics manufacturing services providers; and end users are demanding lower prices.

The rising cost of metals and other materials used in connector production, however, has curbed deeper prices cuts, and the easing of price erosion will contribute to the growth of the connector industry, says market researcher Bishop and Associates. The connector industry will grow a healthy 7.5% to more than $3.8 billion in 2006, Bishop forecasts.

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