How to structure this clause
- Identify the exact product category. Wireless devices, computers, audio and video equipment, and small appliances each have their own series. There is no single "consumer electronics" index.
- Pick the matching BLS output series. Wireless devices PCU334220334220, computers PCU334111334111, audio and video PCU334310334310, small appliances PCU335210335210. Use the finished-product code, not a legacy wired-telephony or blended one.
- Use a composite only for custom builds. For contract manufacturing where the buyer specifies the bill of materials, build a composite from the semiconductor guide, a regional assembly-labor wage index, and the finished-product series as a sanity check.
- Add a cap and a floor. This category moves in both directions. A floor protects the supplier from further declines; a cap protects the buyer from a component-shortage spike.
- Do not blend categories. Wireless devices, computers, and small appliances do not move together. Keep each on its own series and its own clause so the driver of any adjustment stays visible.
Real indices exist, one per product category
Unlike several verticals covered elsewhere on this site, consumer electronics has direct, real BLS output indices for the finished products themselves, not just their inputs. There is no single "consumer electronics" index, though. Each product category has its own series.
| Product category | Benchmark | Note |
|---|---|---|
| Wireless devices, phones, tablets | PCU334220334220 (Radio and Wireless Communications Equipment Mfg) | The modern classification for wireless consumer devices |
| Legacy telephone equipment | PCU334210334210 (Telephone Apparatus Mfg) | Older wired telephony category, distinct from wireless |
| Computers | PCU334111334111 (Electronic Computer Mfg) | |
| Audio and video equipment | PCU334310334310 | |
| Small electrical appliances | PCU335210335210 |
Pick the code that matches what is actually being bought. A smartphone contract indexed against PCU334210334210 is using a legacy wired-telephony series for a wireless product, a mismatch that will drift from the actual market over time.
When to use a direct index versus a composite
If the contract buys a finished, catalog-standard product, index directly to the matching series above. If the contract is for a custom-assembled device, contract manufacturing where the buyer specifies the bill of materials, build a composite instead: the semiconductor guide for the chips, a regional assembly-labor wage index, and the relevant finished-product series above as a sanity check against the composite total.
A worked example
A wireless device supply contract signs at a PCU334220334220 base index of 100. Eighteen months later, the index reads 94, a 6% decline, typical for consumer electronics as component costs fall and manufacturing scales. On a $2,000,000 annual purchase commitment, that is a $120,000 reduction, assuming the clause escalates in both directions. A clause with no floor protecting the supplier from further declines, or no cap protecting the buyer from a component shortage spike, leaves one side exposed to a swing this category regularly produces.
Don't blend categories that move differently
Wireless devices, computers, and small appliances do not move together. Component shortages hit wireless devices and computers hard while barely touching small appliances, and the reverse happens with commodity metal cost spikes. Blending them into one index, or one shared escalation clause, hides which category actually drove the cost change.