Issue link: https://iconnect007.uberflip.com/i/1475010
40 SMT007 MAGAZINE I AUGUST 2022 Johnson: In closing, I wanted to talk about the emergence of some very focused advo- cacy groups in the United States—USPAE and PCBAA. Obviously, the IPC has been involved in advocacy on a global level, which includes some in the U.S. Do you feel these organizations are having an impact? DuBravac: Yes. My read on Washington is that they are more receptive than ever, and that you have some people who are really wanting a good outcome, and really want- ing to understand our industry. ere's a desire to understand the factors that cause it to grow or move, and the forces that will drive investment, to understand the nuances of our industry. I don't know that I've really felt that in the past. Johnson: Is there anything else you would li ke our reader s to under stand ab out the current economic climate or another topic? DuBravac: I would point to some of IPC's research. at sentiment content we publish every month gives a good sense of how the industry is feeling. You see the mix of emotions. ey report high and rising costs. ey report pricing pressure when it comes to materials and components as well as labor. At the same time, they talk about strong pent-up demand in terms of backlog. is last month, we saw that profit margins are coming under pressure. is is a challenging environment for manufac- turers—how to price in an environment where your costs are rising is a challenge, and com- panies haven't been in this environment for a very long time so they're learning. at's a piece that they definitely need to incorporate. Some of the data shows that. Concerns around inflation and recessions from the most recent study were very interesting as well. Johnson: Great. ank you, Shawn. SMT007 there is still strong growth. Europe is look- ing at high inflation in an environment where there isn't strong growth. ey must move much more delicately and be much more ten- tative than the United States. We're probably looking at another 50-basis point hike here at the next meeting, but there are definitely talks. I haven't looked at the future's market to see what's priced in, but there are talks of maybe they'll move 75 basis points given the inflation numbers that we got recently. My sense is the Fed feels like they have the luxury of being able to move aggres- sively because unemployment is low and there are many job openings. e rest of the econ- omy, the rest of the world, doesn't have that luxury. ings are slowing. Asia is not facing quite the inflation rates that we have here, but Europe is definitely slowing at the same time that they have very high inflation rates. at's a very difficult environment to be in.