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24 PCB007 MAGAZINE I APRIL 2020 will close down for about a week, as it relates to the lunar new year, extend that period and were closed for several weeks in addition to the regular one week delay. The regular one- week lunar holiday is well known within the industry, obviously if you're in any type of manufacturing, but certainly, within electron- ics manufacturing, you're aware of that, and you plan around it. As that extended to include several weeks, companies began doing what the companies in the supply chain do very well actually, and they respond to these events very well by increasing the information flow within the supply chain, understanding what's going on, understanding where they might be hindered with regard to further production and what steps they need to take essentially to ensure that they can contin- ue to produce. So they ramped up communica- tions, they started to look for alternative sourc- ing options, they curtailed business travel, they started to look for alternatives. If the business travel, for example, was related to new product introductions, how they could continue to ac- celerate new product introductions while not traveling to Asia. And then obviously what has transpired in recent weeks is that initial supply shock has dissolved into a demand shock as well. And as a result of countries across the globe, not just the United States and North Ameri- ca but also throughout Europe, closing down essentially to help fight the spread of the vi- rus, you've seen a very significant demand shock go into effect, and that will push us into recession. We're probably in recession now in the U.S. and throughout Europe. We're probably quite close to a global reces- sion or at least global growth very near ze- ro. And we expect that to continue through probably about the third quarter, calendar Q3 of 2020. And then we'll start to see things build out of the recession as we move into Q4 and into 2021, which is in many ways a standard response to an economic shock, to one of these exogenous shocks, and to a recession. And so while every recession is unique, we see the economy respond in very similar ways. Matties: A lot of people are speculating the speed at which the recovery will happen. Some say it's going to be slow; others are saying a V-shaped recovery. What's your expectation? DuBravac: Well, what you tend to have, cer- tainly what we had after 9/11, what we had in the 2007 to 2009 period, we had a lot of uncertainty. And so we're all feeling that right now, and you have a lot of uncertainty. You see a wide separation, I'll call it a diversion, in the forecasts that are being produced because of that uncertainty. And again, the way we tend to measure economic growth is looking at quarter over quarter at an annualized rate. So you start to see that recovery in the back half of the year, the fourth quarter of the year, for a couple of reasons. One is because you're comparing it to the down quarters of the sec- ond quarter and the third quarter. And we do expect to see a very steep decline in the second quarter of the year looking at macroeconomic variables. So whether we're looking at the overall economy or even anything else—consumer spending, you name it, unemployment—and all of those will get materially worse in the second quarter. And then as we start to re- turn to normal as businesses reopen, as we presumably have some response to this or at least, if you will, we've addressed the ini- tial cause of the decline being the virus here, then you'll start to see businesses come back, you'll start to see consumers come back. They won't necessarily come back to the same levels of output and consumption that they were prior to that. But because they're coming back and because we're measuring growth, you'll start to see some of that recov- ery begin in the fourth quarter. So it depends on how you're looking at it. Yes, we see, at least for right now, a relatively short reces- sionary period that will last probably from about now until the end of the third quarter or so. And then you start to see the economic recovery. But it will take some time before we return to the levels of production that we were enjoying prior to the onset of this recession.

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