Europe’s EMS recovery has an asterisk. The headline only shows you one part of the story.

Key Summary

• Europe’s EMS industry has passed the bottom of the cycle, with first-half 2026 revenue up 12.3% from late 2025, book-to-bill recovering to 1.21, and order backlogs rising nearly 14%.
• The recovery remains uneven across Europe, with the survey group essentially flat year over year at +0.3%, stronger momentum in Western Europe and Central Eastern Europe, and more muted performance across the DACH region.
• Supply chain pressure has replaced weak demand as the main concern, with only 10.9% of companies rating supply conditions as good and 38.4% calling them poor or very bad.
• Revenue growth may not translate directly into profit growth, as component price inflation, selective shortages, and potential double-ordering could distort order books and margins through 2026 and 2027.

By Philip Stoten, journalist, speaker and host specialising in the global electronics manufacturing services industry

The Global Electronics Association’s half-year survey of the European EMS industry carries an encouraging message: the sector has passed the bottom of the cycle.

The first half of 2026 came in 12.3% above the trough of late 2025. Book-to-bill has climbed back to 1.21. Order backlogs have grown by nearly 14%. And almost three quarters of participants now rate their order situation as good or very good. After two subdued years, the mood has clearly turned.

Then you look closer, and the picture gets more interesting.

Measured against the same half of last year, the survey group is essentially flat, at plus 0.3%. The more positive 10.3% figure in the report reflects a broader calculation that also includes listed players whose results come from published accounts. Those companies follow a different path. Many were already growing from 2024 to 2025, while the survey group was still shrinking. They did not experience the downturn in the same way the rest of the industry is now climbing out of.

That matters because this is not one uniform European recovery. It is a market moving at different speeds.

The strongest order indicators are coming from Western Europe outside the DACH core. Central Eastern Europe has also turned sharply, with backlog growth of 36.3% and small and medium-sized companies there expecting more than 22% growth for the year. But CEE is coming off a weaker base, and half of the companies in the region rate their supply situation as poor or very bad.

The DACH core is more muted. Germany finished the first half essentially flat year on year, at minus 0.5%, though it was 14.5% above its weak second half of 2025, and nearly 70% of German companies forecast growth for the full year. Switzerland continues on a steadier course at plus 5.5%. Austria remains the weakest region in the survey, the only one with book-to-bill below 1.0 and an order backlog still shrinking.

Meanwhile, the real problem has moved. It is no longer the order book. It is the supply chain.

Only 10.9% of participants rate their current supply situation as good. Another 38.4% call it poor or very bad. Not one describes it as very good. The report calls this its clearest warning signal.

This is not a repeat of the broad 2021 crunch. It is more selective. Memory is the epicenter, as AI and high-bandwidth memory demand pull wafer capacity away from conventional DRAM and NAND. Around that, pockets of mature-node, automotive, power, analog, RF, and passive components are tightening again, even as most commodity logic remains available. Smaller companies feel the pressure more than large ones, and Eastern Europe more than the West.

Two cautions are worth carrying into the optimism. First, revenue growth is not always profit growth. A meaningful part of the forecast increases — plus 7.2% for 2026 and plus 8.6% for 2027 — will likely be component price inflation passed through from the bill of materials. Second, watch the quality of order intake. A book-to-bill of 1.21 in a tightening supply market is exactly where double-ordering can appear.

None of this diminishes the turn. Europe’s EMS industry has passed the bottom, and order books support a stronger second half. But the useful reading is the pattern underneath: a real recovery, still close to flat against last year, and a supply chain that has quietly become the thing to worry about.

Welcome the recovery. Then look closer.

Philip Stoten is a journalist, speaker and host specialising in the global electronics manufacturing services industry. He hosts the EMS@C-Level, MADE IN EUROPE and EMS India podcasts.