Industry Pulse - Aug '05

* Venture Outsource reported an increase in number of industry job placement assignments it received from EMS, ODM, and OEM companies. Companies wanting to leverage the firm's industry position to enhance hiring efforts can contact Venture Outsource at VentureOutsource.com.

* Recent revaluation of the Chinese yuan may make non-China based EMS provider locations, such as Mexico and parts of Eastern Europe, more cost-competitive than ODMs which are almost exclusively in China. Chinese labor costs are likely to be most impacted, albeit only slightly. Flextronics and Jabil are among providers with the highest China labor exposure, which can account for 3% to 5% of a product's total cost, when manufactured in China.

* Benchmark Electronics reported significantly declining margins for Q2 while sales improved. Perhaps since the Company has such high exposure to both Sun and EMC as primary customers, both OEMs could be using this as leverage and applying pressure for more favorable contract terms.

* Celestica reported orders weakened in July. Also, the Company's drive to improve margins seems to be more of a function of bringing in the ‘right' business than relying on its restructuring activity. Meanwhile, European operations fell deeper in the red. Its server/mainframe business is currently flat following a Q1 7% decline.

* Plexus announced improved gross and operating margins which can be attributed to the Company managing its business better, or possibly faster than expected top-line growth, or both. The Company is also seeing higher volumes in the industrial end-market.

VentureOutsource.com, August 2005