Now, the $40 million is just straight math. You take the six-year average before COVID of annual builds, and you take what happened during COVID and you come up with that $40 million deficit. I have no idea how long it’s going to take to make up that deficit and how spread out that will be. But it’s not going to be zero. That deficit will need to be made up because in many countries you still have population growth, in many countries you still have cars per capita or cars per household being much lower than the developed world. And you’ve still got aging fleets. Mature parts of the world, US, Europe, average car in a road is like 11 or 12 years old. So the fundamentals say at some point, some significant part of that $40 million deficit needs to be made up.
It’s a question of how stretched out that will be.
Operator: Your next question comes from the line of [indiscernible]. Your line is now open.
Unidentified Analyst: Hi, guys. Thanks for the question. I have one on segment margin. So your sector margins expanded 300 basis — 330 basis points in Q2 and they were expanded 370 basis points in Q1. I understand we are past the peak in terms pricing initiatives, but we start to see really the widening gap of raw materials going down. And some of the volumes we are talking in the weak markets are bottoming. So what could prevent margins in Q2 and Q3 to expand — to accelerate in terms of expansion again?
Vince Morales: Yeah, I think we talked about this a little earlier in the call. We do expect, again, incremental deflation to flow through to our P&L. We’re starting to lap some pricing. We do, especially in the industrial businesses, we do see volume as the biggest catalyst in the back half of the year or in 2024 to help improve the margins as well as, Tim mentioned earlier, manufacturing — PPG manufacturing as a key element and we laid that out in our May New York meeting. So those would be the four key elements that I would point to that would impact our margins in the back half of the year.
Operator: Your next question comes from the line of Laurence Alexander. Your line is now open.
Laurence Alexander: Good morning. Just a quick one. What’s the net drag for earnings and margins from the destocking you’re doing this year? Just trying to think about kind of how that translates into the bridge for next year?
Vince Morales: Interesting question, Laurence. I’m doing the math in my head as we speak. But again, what we’re seeing is, it’s called mid to high single digit deflation on our invoices. We’re realizing mid single digit inflation through our P&L. So I’m going to guess that that’s $0.05 to $0.10 a quarter. Looking at John here to make sure my math is proper. But that would be the delay. That’s not coming through on a real time basis into our P&L.
Operator: Your next question comes from the line of Arun Viswanathan. Your line is now open.
Arun Viswanathan: Great. Thanks for taking my question. Just wanted to understand kind of the volume outlook overall. It sounds like obviously aerospace and automotive OEM volumes have been trending positively and you expect that to continue. Now you’re calling out some weakness in packaging and some of the other markets. So is there a path to maybe overall positive volume by the first half of next year given some easier comps in some of these industrial businesses and maybe a persistence of volume growth in auto and aerospace. So I’m probably thinking about how kind of volume growth overall trends for the next couple periods. Thanks.
