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To better understand the current economic situation for electronics manufacturing, we brought in Shawn DuBravac, IPC chief economist, to provide an update with a high level global economic outlook. As you might expect, the seas have been a bit turbulent in the aftermath of the pandemic. Shawn breaks down the headwinds and the tailwinds of an economy in flux, and what it means for you.
Barry Matties: Shawn, give us a brief review of 2023.
Shawn DuBravac: The U.S. economy held up much better in 2023 than we anticipated and showed significant resiliency. Europe faltered somewhat, and that was not unexpected. In fact, we saw some growth in Europe, so one might argue that Europe held up better last year than we had anticipated. Yet, headwinds remain in Europe. The conflict in Ukraine continues to weigh on Europe.
China has faced stiffer headwinds than many anticipated. There was the expectation that, following the reopening of China early in 2023, things would pick up. We saw an initial bounce, but things have since settled, and in fact, there are some very big warning signs coming out of China right now.
Matties: When it comes to the economic forecast, what should we be concerned about?
DuBravac: Looking ahead, industry should be thinking about a few things. First, where does growth go from here? There is concern that the U.S. market will slow. We've had interest rate hikes across the globe, not just from the Federal Reserve, but from the European Central Bank and others. Ultimately, this means slower growth, and a potential recession. Those risks remain acute.
To read the rest of this article, which first appeared in the December 2023 issue of SMT007 Magazine, click here.
