Cleveland, OH— Demand for insulated wire and cable in the U.S. is expected to increase 5.1% per year through 2006 to more than $26 billion, according to a recent study, Insulated Wire & Cable, by the Freedonia Group Inc. Though well below the robust gains made during most of the 1990s, projected growth for the insulated wire and cable market could represent a significant improvement in the market's performance over the past three years, which Freedonia says were hindered by weakness in technology-related capital investment.

The study found that the best growth prospects will be for high-end products, such as fiber-optic, coaxial and multi-conductor wire and cable. Motor vehicle wire is also expected to achieve improved gains because of an improved outlook for U.S. light vehicle production. However, these gains for the wire and cable industry will be dampened by what Freedonia calls a difficult pricing environment. This is reportedly because many types of wire and cable are increasingly viewed as commodities.

The main growth-restraining factor for fiber-optic cable will be the capacity glut that occurred when fiber-optic networks were overbuilt in 1999 and 2000. This will take more time to alleviate, though cable demand is expected to recover and begin to grow more quickly as demand for high-speed data services expands with greater availability.

The study also found that international trade will continue to play a major role in the insulated wire and cable field with import and exports each comprising more than 20% of total shipments. Export opportunities will be best for more advanced products, such as fiber-optic cable, because these products will be increasingly used in construction of telecommunication networks in developing nations. Despite an overall trade surplus, the U.S. will continue to run a significant deficit in some insulated wire and cable product categories, such as telephone and motor vehicle wire.