1 00:00:01,760 --> 00:00:15,720 Speaker 1: Well here it comes. Oh my goodness, oh wow, in 2 00:00:15,960 --> 00:00:26,920 Speaker 1: your life have you seen anything like that? Hello, and 3 00:00:27,000 --> 00:00:30,040 Speaker 1: welcome to Stephanomics, the podcast that brings the global economy 4 00:00:30,080 --> 00:00:32,720 Speaker 1: to you. And this week also a moment of golfing 5 00:00:32,760 --> 00:00:35,800 Speaker 1: magic from Tiger Woods as he won the US Masters 6 00:00:35,800 --> 00:00:39,400 Speaker 1: in augusta back in two thousand and five. Last year's 7 00:00:39,440 --> 00:00:41,760 Speaker 1: Masters was one of the first big sporting events to 8 00:00:41,760 --> 00:00:46,600 Speaker 1: be canceled due to COVID nineteen one contest kicked off 9 00:00:46,640 --> 00:00:49,920 Speaker 1: in grand form this week, one of many hopeful signs 10 00:00:49,920 --> 00:00:52,960 Speaker 1: of life returning to normal. But a lot of golf 11 00:00:53,000 --> 00:00:56,240 Speaker 1: courses aren't coming back from the pandemic, and it's all 12 00:00:56,320 --> 00:00:59,639 Speaker 1: down to the booming online shopping. Stay tuned to hear 13 00:00:59,680 --> 00:01:02,320 Speaker 1: more that and to learn how the UK is managing 14 00:01:02,600 --> 00:01:05,560 Speaker 1: after a hundred days of being properly out of the 15 00:01:05,560 --> 00:01:13,520 Speaker 1: European Union. First the return of the v shaped recovery. 16 00:01:13,720 --> 00:01:15,840 Speaker 1: In the past few weeks, we've had an outpouring of 17 00:01:15,880 --> 00:01:20,240 Speaker 1: optimism about the economic recovery, especially in the US. They 18 00:01:20,280 --> 00:01:23,520 Speaker 1: are annual meetings. This week, the International Monetary Fund added 19 00:01:23,600 --> 00:01:26,720 Speaker 1: its voice to the chorus with the prediction that developed 20 00:01:26,760 --> 00:01:29,679 Speaker 1: economies could not only enjoy two years of rapid growth 21 00:01:29,680 --> 00:01:33,280 Speaker 1: in one and twenty two, but see little or no 22 00:01:33,440 --> 00:01:38,520 Speaker 1: permanent hit from the downturn of the IMF does see 23 00:01:38,560 --> 00:01:42,640 Speaker 1: inequality increasing due to the pandemic, with ninety five million 24 00:01:42,720 --> 00:01:46,640 Speaker 1: more people having been pushed into extreme poverty, and bumpier 25 00:01:46,720 --> 00:01:50,960 Speaker 1: recoveries in prospect for many emerging market economies. All in all, 26 00:01:51,240 --> 00:01:53,040 Speaker 1: it seems a good opportunity to check in with our 27 00:01:53,080 --> 00:01:56,560 Speaker 1: chief economist, Tom Marlick in d C. Tom, you have 28 00:01:56,640 --> 00:01:59,240 Speaker 1: your own forecast out, just give us, give us some 29 00:01:59,280 --> 00:02:02,720 Speaker 1: of the highlight. So, first of all, Stephanie here at 30 00:02:02,760 --> 00:02:07,160 Speaker 1: Bloomberg Economics, we were a little bit disappointed by the 31 00:02:07,240 --> 00:02:10,080 Speaker 1: I m F rushing out their world economic outlook just 32 00:02:10,160 --> 00:02:14,079 Speaker 1: a few minutes after we published our global forecast. Seemed 33 00:02:14,080 --> 00:02:17,120 Speaker 1: like it rather crass attempts to steal the limelight from us. 34 00:02:17,880 --> 00:02:21,720 Speaker 1: But turning to turning to the substance um, the I 35 00:02:21,919 --> 00:02:26,160 Speaker 1: m F up their forecast from five five to six percent. 36 00:02:27,000 --> 00:02:31,840 Speaker 1: That's an optimistic forecast. We're even more optimistic at Bloomberg Economics. 37 00:02:31,840 --> 00:02:35,040 Speaker 1: We're penciling in six point nine percent growth for the 38 00:02:35,080 --> 00:02:38,799 Speaker 1: world economy this year. What are the big factors at work? Well, 39 00:02:39,120 --> 00:02:42,080 Speaker 1: there's two main forces. First, you've got a virus in 40 00:02:42,200 --> 00:02:46,520 Speaker 1: retreat as vaccines roll out across advanced and some emerging 41 00:02:46,560 --> 00:02:51,519 Speaker 1: market economies. Secondly, you've got that huge US stimulus one 42 00:02:51,520 --> 00:02:54,880 Speaker 1: point nine trillion dollars, perhaps more to come if Biden 43 00:02:54,919 --> 00:02:58,360 Speaker 1: gets his infrastructure deal through. That pushes growth in the 44 00:02:58,480 --> 00:03:00,919 Speaker 1: US up to its highest level all since the early 45 00:03:01,000 --> 00:03:04,800 Speaker 1: nine eighties and sends ripples around the world as trade 46 00:03:04,800 --> 00:03:09,640 Speaker 1: partners benefit from stronger US in boards. And we did think, 47 00:03:09,720 --> 00:03:11,600 Speaker 1: I remember when we were talking about this last year, 48 00:03:11,639 --> 00:03:15,520 Speaker 1: we thought that the emerging market economies would do a 49 00:03:15,560 --> 00:03:20,440 Speaker 1: lot worse than the developed economies economically, and that everywhere 50 00:03:20,480 --> 00:03:25,880 Speaker 1: we would see significant permanent scars from this crisis. Are 51 00:03:25,919 --> 00:03:29,200 Speaker 1: we revisiting either of those of you? So? I think 52 00:03:29,240 --> 00:03:32,760 Speaker 1: on the emerging market side, there's two big points to make. 53 00:03:33,000 --> 00:03:37,840 Speaker 1: The first is a point about China. China really dominates 54 00:03:37,880 --> 00:03:40,400 Speaker 1: the emerging market space if you think about the size 55 00:03:40,400 --> 00:03:44,480 Speaker 1: of its economy. It was remarkably successful in controlling its 56 00:03:44,520 --> 00:03:48,680 Speaker 1: domestic outbreak, is having a v shaped recovery, and that 57 00:03:48,840 --> 00:03:52,880 Speaker 1: significantly shapes the sort of the overall emerging market picture. 58 00:03:53,680 --> 00:03:56,720 Speaker 1: Second point to make about emerging markets is once you 59 00:03:56,800 --> 00:03:59,560 Speaker 1: get past China. You really have to draw a distinction 60 00:04:00,000 --> 00:04:06,200 Speaker 1: between the exporters and the borrowers. The exporters countries like Vietnam, 61 00:04:06,320 --> 00:04:09,480 Speaker 1: for example, they're going to have a stronger year as 62 00:04:09,520 --> 00:04:15,560 Speaker 1: they benefit from resurgent global demand. The borrowers, places like Turkey, 63 00:04:15,680 --> 00:04:21,240 Speaker 1: places like Argentina are already suffering as US yields borrowing 64 00:04:21,279 --> 00:04:24,680 Speaker 1: costs start to rise. Thinking about the sort of the 65 00:04:24,760 --> 00:04:28,120 Speaker 1: largest scarring story, UM, I think the sort of the 66 00:04:28,279 --> 00:04:32,360 Speaker 1: unique character of the crisis was really that it was 67 00:04:32,400 --> 00:04:36,000 Speaker 1: a kind of a pure exogenous shock. It was like 68 00:04:36,040 --> 00:04:39,360 Speaker 1: the world was hit by an asteroid. There really wasn't 69 00:04:39,400 --> 00:04:43,240 Speaker 1: a sort of a fundamental problem of fundamental imbalance with 70 00:04:43,320 --> 00:04:46,400 Speaker 1: the world economy which caused the recession. It was just 71 00:04:46,480 --> 00:04:49,640 Speaker 1: the virus. And so the hope was always that if 72 00:04:49,640 --> 00:04:52,640 Speaker 1: we can get enough stimulus into the economy to keep 73 00:04:52,680 --> 00:04:56,719 Speaker 1: businesses solvent, to keep households afloat until a vaccine is found, 74 00:04:57,000 --> 00:04:59,640 Speaker 1: then we can have a pretty rapid recovery. And so 75 00:04:59,720 --> 00:05:02,560 Speaker 1: now countries like the US and the UK where the 76 00:05:02,640 --> 00:05:05,320 Speaker 1: vaccines are rolling out fast, that's what we're starting to 77 00:05:05,360 --> 00:05:09,159 Speaker 1: see happen. I noticed that the IMF part of their 78 00:05:09,240 --> 00:05:12,719 Speaker 1: reasoning was that the area, the parts of the economy 79 00:05:12,760 --> 00:05:15,920 Speaker 1: that have been worst hit, what they would cause sort 80 00:05:15,960 --> 00:05:21,480 Speaker 1: of contact intensive so places, hospitality, things where people are 81 00:05:22,120 --> 00:05:25,680 Speaker 1: are in contact with each other. That that that the 82 00:05:25,760 --> 00:05:28,960 Speaker 1: damage done to those sectors was more likely to be 83 00:05:29,240 --> 00:05:32,920 Speaker 1: temporary and would not necessarily feed through to the broader economy. 84 00:05:33,040 --> 00:05:35,640 Speaker 1: And the way that you've seen, for example, the damage 85 00:05:35,640 --> 00:05:39,520 Speaker 1: and the financial sector and the global financial crisis affect everything. 86 00:05:40,000 --> 00:05:41,560 Speaker 1: Do you think do you think there's some truth in 87 00:05:41,600 --> 00:05:43,839 Speaker 1: that or are they are they underestimating some of the 88 00:05:43,839 --> 00:05:46,760 Speaker 1: possible long term effects. That's a good question. I mean, 89 00:05:46,839 --> 00:05:49,839 Speaker 1: I guess if you think about the global economy, you 90 00:05:49,880 --> 00:05:53,599 Speaker 1: can think about sort of critical nodes in the global 91 00:05:53,640 --> 00:05:57,680 Speaker 1: supply chain and other parts of the economy which are 92 00:05:57,720 --> 00:06:01,119 Speaker 1: important but don't have so many inter connections, don't touch 93 00:06:01,200 --> 00:06:05,000 Speaker 1: so many other points. So at one extreme, if you 94 00:06:05,120 --> 00:06:10,360 Speaker 1: blew up Taiwan semiconductor industry, that would really send some 95 00:06:10,480 --> 00:06:14,279 Speaker 1: really serious ripples around the world. Right, we couldn't make smartphones, 96 00:06:14,360 --> 00:06:17,520 Speaker 1: we couldn't make cars, we couldn't make laptops. The world 97 00:06:17,560 --> 00:06:21,080 Speaker 1: economy would in significant respect grind to a halt um. 98 00:06:22,160 --> 00:06:26,000 Speaker 1: If you blew up your local Kentucky Fried Chicken or 99 00:06:26,040 --> 00:06:30,360 Speaker 1: your local cinema chain. That would be really bad news 100 00:06:30,440 --> 00:06:33,000 Speaker 1: for the for the people who worked there, bad news 101 00:06:33,040 --> 00:06:35,719 Speaker 1: for the local residents who enjoyed that service. But the 102 00:06:35,720 --> 00:06:39,640 Speaker 1: global ripple effects wouldn't be so severe. So perhaps a 103 00:06:39,720 --> 00:06:43,080 Speaker 1: virus that has devastating impacts on those sort of high 104 00:06:43,080 --> 00:06:47,479 Speaker 1: contact service industries that leaves the kind of the sort 105 00:06:47,480 --> 00:06:52,040 Speaker 1: of the hard infrastructure of the industrial sector largely untouched, 106 00:06:52,480 --> 00:06:55,320 Speaker 1: maybe it doesn't leave such long term, such deep scars. 107 00:06:56,000 --> 00:06:58,560 Speaker 1: We were talking to Heavier Blast last week about the 108 00:06:58,600 --> 00:07:00,240 Speaker 1: vulnerable points in the U s A on. I mean, 109 00:07:00,240 --> 00:07:02,200 Speaker 1: I feel like we're developing a bit of a sideline 110 00:07:02,240 --> 00:07:04,640 Speaker 1: and sort of how to guide for for would be 111 00:07:04,680 --> 00:07:09,000 Speaker 1: global terrorists who want to bring down the global economy, 112 00:07:09,080 --> 00:07:11,240 Speaker 1: just pointing up the key places they ought to try 113 00:07:11,320 --> 00:07:13,640 Speaker 1: and hit um. I did see that the head of 114 00:07:13,680 --> 00:07:18,040 Speaker 1: JP Morgan Jamie Diamond, in his letter for this year, 115 00:07:18,320 --> 00:07:21,640 Speaker 1: had been extremely optimistic about the US recovery and thought 116 00:07:21,640 --> 00:07:25,920 Speaker 1: that the boom could continue for for several years. Are 117 00:07:25,960 --> 00:07:28,880 Speaker 1: we seeing risks there? I mean, there is now so 118 00:07:28,960 --> 00:07:32,320 Speaker 1: much optimism about the pace of US growth and so 119 00:07:32,400 --> 00:07:37,160 Speaker 1: much government money pouring into the economy. So I think 120 00:07:37,200 --> 00:07:39,280 Speaker 1: if we go back a couple of months to the 121 00:07:39,400 --> 00:07:43,960 Speaker 1: end of twenty UM, there were a couple of big 122 00:07:44,080 --> 00:07:48,120 Speaker 1: negative factors which people were concerned about for the US 123 00:07:48,160 --> 00:07:53,200 Speaker 1: in addition to the virus UM, so we had a 124 00:07:53,320 --> 00:07:58,080 Speaker 1: really fragile political situation. It looked like there might not 125 00:07:58,160 --> 00:08:01,400 Speaker 1: be sort of a clear control of the White House 126 00:08:01,400 --> 00:08:04,520 Speaker 1: and Congress by a single party, and that could stem 127 00:08:04,560 --> 00:08:08,160 Speaker 1: the attempts at fiscal stimulus. And we had the looming 128 00:08:08,280 --> 00:08:12,280 Speaker 1: threat of US China decoupling and all that could mean 129 00:08:12,640 --> 00:08:17,040 Speaker 1: for exports UM and for global supply chains UM. From 130 00:08:17,080 --> 00:08:19,600 Speaker 1: where we're sitting at the end of the first quarter 131 00:08:19,680 --> 00:08:24,080 Speaker 1: of one, both of those problems looked to have been 132 00:08:24,120 --> 00:08:27,760 Speaker 1: resolved or looked to be moving in a positive direction. UM. 133 00:08:27,800 --> 00:08:30,760 Speaker 1: The Democrats have got control of the White House and 134 00:08:30,800 --> 00:08:33,160 Speaker 1: control of Congress and they're using that to push through 135 00:08:33,559 --> 00:08:37,440 Speaker 1: very significant fiscal stimulus and talking about a big infrastructure bill. 136 00:08:37,840 --> 00:08:43,440 Speaker 1: And US China tensions they're they're they're escalating, But early 137 00:08:43,520 --> 00:08:46,760 Speaker 1: indications seemed to be that they could provide a motive 138 00:08:47,200 --> 00:08:50,760 Speaker 1: for the US to kind of invest in its future, 139 00:08:51,080 --> 00:08:55,120 Speaker 1: invest in infrastructure, invest in education in a way which 140 00:08:55,440 --> 00:08:58,040 Speaker 1: if done right and if done on on the right scale, 141 00:08:58,559 --> 00:09:03,080 Speaker 1: could start edging potential growth higher. And so certainly things 142 00:09:03,080 --> 00:09:05,880 Speaker 1: are looking a lot better now than they were three 143 00:09:05,880 --> 00:09:09,959 Speaker 1: months ago. But let's remember also how sort of tenuous, 144 00:09:09,960 --> 00:09:13,760 Speaker 1: how fragile the politics which has underpinned this shift. Is 145 00:09:14,120 --> 00:09:17,200 Speaker 1: that fifty fifty split in the Senate, which is really 146 00:09:17,240 --> 00:09:19,600 Speaker 1: the kind of the fulcrum on which all of this 147 00:09:19,720 --> 00:09:23,200 Speaker 1: is turning, could really move in either direction in the 148 00:09:23,280 --> 00:09:27,280 Speaker 1: years ahead. Well, we're going to hear about the impact 149 00:09:27,320 --> 00:09:31,080 Speaker 1: of Brexit in the UK in a minute, but it 150 00:09:31,160 --> 00:09:33,280 Speaker 1: does make me wonder, I mean, when you that the 151 00:09:33,400 --> 00:09:36,400 Speaker 1: mute music coming out of Europe and the UK at 152 00:09:36,400 --> 00:09:39,840 Speaker 1: the moment is much darker than this feeling that they 153 00:09:39,840 --> 00:09:42,680 Speaker 1: have really messed up the vaccine rollout in the case 154 00:09:42,679 --> 00:09:48,520 Speaker 1: of the europe renewed lockdowns, causing some to to revisit 155 00:09:48,640 --> 00:09:51,959 Speaker 1: their forecast for the European economy. Is that I mean, 156 00:09:52,080 --> 00:09:54,240 Speaker 1: is this the story that we're telling, The sort of bright, 157 00:09:54,400 --> 00:09:57,960 Speaker 1: bright v shaped story we're telling is that primarily the U, 158 00:09:58,040 --> 00:10:00,160 Speaker 1: S and China we're talking about, with Europe in the 159 00:10:00,280 --> 00:10:05,880 Speaker 1: UK potentially suffering more damage. So, um, the US and China, 160 00:10:06,240 --> 00:10:09,480 Speaker 1: they're the biggest economies in the world. They're both going 161 00:10:09,520 --> 00:10:13,320 Speaker 1: to outperform this year. We're penciling in seven point seven 162 00:10:13,360 --> 00:10:16,079 Speaker 1: percent growth for the United States on a four quarter 163 00:10:16,160 --> 00:10:20,160 Speaker 1: four quarter basis, nine point three percent growth for China. 164 00:10:20,240 --> 00:10:23,240 Speaker 1: With those two big economies doing so well, the world 165 00:10:23,320 --> 00:10:26,720 Speaker 1: picture looks pretty positive. Europe, as you as you know, 166 00:10:27,120 --> 00:10:29,439 Speaker 1: is some way behind that. We see four point four 167 00:10:29,480 --> 00:10:33,319 Speaker 1: percent growth for the Eurozone this year and the recovery 168 00:10:33,640 --> 00:10:37,520 Speaker 1: starting later because they haven't done so well at rolling 169 00:10:37,520 --> 00:10:41,079 Speaker 1: out their vaccination program. Still, if you can kind of 170 00:10:41,320 --> 00:10:44,880 Speaker 1: step outside the kind of the intensity of the momentum 171 00:10:45,120 --> 00:10:48,640 Speaker 1: and think about the sort of slightly bigger picture for Europe, Yes, 172 00:10:48,679 --> 00:10:50,720 Speaker 1: their recovery is going to be a bit slower, Yes 173 00:10:50,760 --> 00:10:53,040 Speaker 1: it's going to be a bit later, but we still 174 00:10:53,080 --> 00:10:56,560 Speaker 1: see Europe coming back very strongly from later in the 175 00:10:56,600 --> 00:10:59,199 Speaker 1: second quarter and heading into the second half of the year. 176 00:11:00,320 --> 00:11:10,120 Speaker 1: Tom Marlick, thank you very much. Thanks Stephanie. Now I 177 00:11:10,160 --> 00:11:13,800 Speaker 1: mentioned Brexit. Last time we heard from Bloomberg economic reporter 178 00:11:13,920 --> 00:11:17,080 Speaker 1: Lizzie Burden, she was talking to lorry drivers queuing at 179 00:11:17,080 --> 00:11:19,640 Speaker 1: the port of Dover, wondering whether they would get home 180 00:11:19,679 --> 00:11:23,520 Speaker 1: for Christmas. Since then, Britain has probably left the European 181 00:11:23,640 --> 00:11:28,400 Speaker 1: Union and early heavily distorted numbers suggests that trade between 182 00:11:28,440 --> 00:11:31,440 Speaker 1: the UK and the EU has fallen dramatically. If you 183 00:11:31,480 --> 00:11:35,480 Speaker 1: make your living exporting shellfish, for example, you're hurting. That 184 00:11:35,600 --> 00:11:40,000 Speaker 1: sector's exports to the EU fell by nearly in January. 185 00:11:40,520 --> 00:11:43,760 Speaker 1: But what about everyone else? Are all those gloomy forecasts 186 00:11:43,760 --> 00:11:46,600 Speaker 1: of what Brexit would do to the British economy finally 187 00:11:46,640 --> 00:11:49,680 Speaker 1: coming true? We asked Lizzie to give us an update. 188 00:12:02,640 --> 00:12:05,600 Speaker 1: Almost a hundred days since the chimes of Big Ben 189 00:12:05,760 --> 00:12:09,719 Speaker 1: marked that Brexit was formally completed. The UK government has 190 00:12:09,760 --> 00:12:14,160 Speaker 1: seemingly banned the B word, while coronavirus has overshadowed reports 191 00:12:14,200 --> 00:12:19,280 Speaker 1: of trade disruption. Still, like any divorce, UK EU relations 192 00:12:19,320 --> 00:12:27,480 Speaker 1: have been messy since January one. Some sectors have been 193 00:12:27,559 --> 00:12:31,840 Speaker 1: hit particularly hard. I asked James Withers, chief executive of 194 00:12:31,880 --> 00:12:35,360 Speaker 1: Scotland Food and Drink, why it's been so tough for 195 00:12:35,480 --> 00:12:39,160 Speaker 1: his industry. So for a lot of this a hundred 196 00:12:39,240 --> 00:12:42,000 Speaker 1: days of paid. They have gone from a position where 197 00:12:42,040 --> 00:12:45,000 Speaker 1: it was as easy to sell their cheap drink products 198 00:12:45,000 --> 00:12:47,880 Speaker 1: to Manchester and England as it was to say, into Madrid. 199 00:12:47,920 --> 00:12:52,080 Speaker 1: And what's happened just trying to get it into the EU. 200 00:12:52,760 --> 00:12:57,400 Speaker 1: Then a wave of new paper work, complexity, a lot 201 00:12:57,400 --> 00:13:00,880 Speaker 1: of cost into that, and we've seen systems breakdowns or 202 00:13:01,240 --> 00:13:05,200 Speaker 1: even partly product aisee league. But when they don't go partially, 203 00:13:05,480 --> 00:13:09,440 Speaker 1: the product doesn't move at all. David Hennig, director of 204 00:13:09,480 --> 00:13:12,640 Speaker 1: the UK Trade Policy Project at the European Center for 205 00:13:12,679 --> 00:13:17,960 Speaker 1: International Political Economy, says British firms are disadvantaged because import 206 00:13:18,040 --> 00:13:21,760 Speaker 1: checks have been postponed for goods entering the UK unlike 207 00:13:21,800 --> 00:13:25,760 Speaker 1: those sent to the EU. It's really unbalanced. So explots 208 00:13:25,840 --> 00:13:29,200 Speaker 1: us to to Europe are perhaps wondering why they're the 209 00:13:29,240 --> 00:13:33,400 Speaker 1: only people who are having to go from the full 210 00:13:33,400 --> 00:13:36,920 Speaker 1: set of new checks and nobody else does. When you can, 211 00:13:37,080 --> 00:13:39,880 Speaker 1: you can understand that that frustration, and I'm hearing it 212 00:13:40,440 --> 00:13:43,200 Speaker 1: pretty much up and down the country. Northern Ireland has 213 00:13:43,240 --> 00:13:46,760 Speaker 1: been especially affected because of the Northern Ireland Protocol, which 214 00:13:46,800 --> 00:13:50,480 Speaker 1: effectively draws a trade boarder down the Irish Sea. Ashley 215 00:13:50,480 --> 00:13:54,200 Speaker 1: Piggott is managing director of craig Oven based a j Power, 216 00:13:54,600 --> 00:13:58,760 Speaker 1: a manufacturing company that's been crippled by additional post Brexit 217 00:13:58,880 --> 00:14:03,440 Speaker 1: surcharges to bring components into Northern Ireland from Britain. In 218 00:14:03,559 --> 00:14:07,160 Speaker 1: January there was one hundred and eighteen thousand, three hundred 219 00:14:07,280 --> 00:14:10,960 Speaker 1: consignments into all Ireland, which is a very low number. 220 00:14:11,080 --> 00:14:13,360 Speaker 1: You know, your expectation would be more into the half 221 00:14:13,400 --> 00:14:17,280 Speaker 1: million plus. And all those consignments have to go through 222 00:14:17,280 --> 00:14:21,600 Speaker 1: eventually a process with transportation and typically that adds somewhere 223 00:14:21,600 --> 00:14:24,320 Speaker 1: in the region off between twenty and thirty point surcharge 224 00:14:24,480 --> 00:14:30,480 Speaker 1: per consignment, irrespective of the value. It's a different story 225 00:14:30,640 --> 00:14:34,960 Speaker 1: south of the Irish border. County Dublin based Hollyer Hannon Transport, 226 00:14:35,080 --> 00:14:38,680 Speaker 1: which specializes in moving mixed loads of fresh produce, says 227 00:14:38,720 --> 00:14:42,760 Speaker 1: it's never been busier as Irish importers and wholesalers are 228 00:14:42,800 --> 00:14:46,960 Speaker 1: switching from GB to EU based suppliers. I spoke to 229 00:14:47,120 --> 00:14:50,800 Speaker 1: Donald McCann, the company's managing director. Certainly in the first 230 00:14:50,920 --> 00:14:54,120 Speaker 1: couple of months um that was a very very big 231 00:14:54,240 --> 00:15:00,280 Speaker 1: reduction in the volumes and the that was certainly head 232 00:15:00,360 --> 00:15:03,080 Speaker 1: off in a way that the volumes were in Christo 233 00:15:03,200 --> 00:15:06,400 Speaker 1: our other which was from the entire island of Ireland 234 00:15:07,280 --> 00:15:11,920 Speaker 1: to mainland EU. We were fortunate and that the NI 235 00:15:12,080 --> 00:15:17,720 Speaker 1: protocol hasn't greatly affected us. I mean not in terms 236 00:15:17,760 --> 00:15:21,440 Speaker 1: of whilst we have obviously customers and Northern DAN customers, 237 00:15:21,440 --> 00:15:24,240 Speaker 1: and we have Britain. We've been goods back and forward 238 00:15:24,280 --> 00:15:27,320 Speaker 1: between TV and n I that it would make up 239 00:15:27,320 --> 00:15:32,560 Speaker 1: a reasonably small fraction of the overall volumes that we transport. 240 00:15:32,880 --> 00:15:37,040 Speaker 1: Some businesses in Britain's more distant EU neighbors are suffering too, 241 00:15:37,520 --> 00:15:41,480 Speaker 1: and A Stalinger, deputy director of the Confederation of Swedish Enterprise, 242 00:15:41,800 --> 00:15:45,000 Speaker 1: says a fifth of Swedish companies have had problems trading 243 00:15:45,000 --> 00:15:49,560 Speaker 1: with the UK since January. More companies say that they 244 00:15:49,600 --> 00:15:54,560 Speaker 1: will start finding other suppliers than the supplies from the UK. 245 00:15:54,960 --> 00:15:57,640 Speaker 1: What we can see now is that with the higher cost, 246 00:15:57,720 --> 00:16:00,680 Speaker 1: the higher it shapes, and the intitulation, the liberty and 247 00:16:00,840 --> 00:16:05,080 Speaker 1: the problems in the logistics, Swedish companies are actually looking 248 00:16:05,120 --> 00:16:09,640 Speaker 1: at other countries to source from. So there is less 249 00:16:09,640 --> 00:16:12,760 Speaker 1: of optimism when it comes to imports from the UK 250 00:16:12,800 --> 00:16:18,840 Speaker 1: to Sweden beyond individual companies experiences. The first official UK 251 00:16:19,000 --> 00:16:22,880 Speaker 1: trade data since Brexit for the month of January reskewed 252 00:16:22,960 --> 00:16:26,600 Speaker 1: by the impact of COVID nineteen stop piling ahead of 253 00:16:26,600 --> 00:16:29,640 Speaker 1: the end of the transition period and a hangover effect 254 00:16:29,680 --> 00:16:32,120 Speaker 1: from the pre Christmas chaos at the port of Dover 255 00:16:32,480 --> 00:16:36,000 Speaker 1: when France shut its borders. So I asked David Hennig 256 00:16:36,160 --> 00:16:39,680 Speaker 1: what lies ahead. There's still a lot to happen in 257 00:16:39,720 --> 00:16:44,160 Speaker 1: the UK trade story. This is just the beginning hundred days. 258 00:16:44,400 --> 00:16:45,880 Speaker 1: I mean, there is a reason why I can again 259 00:16:45,920 --> 00:16:48,400 Speaker 1: back assessments for trade deals and normally take place over 260 00:16:48,480 --> 00:16:51,080 Speaker 1: ten years. There's a huge amount of adjustment still to 261 00:16:51,200 --> 00:16:54,520 Speaker 1: happen in the UK you trade. It seems clear that 262 00:16:54,880 --> 00:16:58,760 Speaker 1: what the UK government has described as teething problems could 263 00:16:58,840 --> 00:17:16,520 Speaker 1: be here to stay. M Now, finally, I promised I 264 00:17:16,560 --> 00:17:19,880 Speaker 1: was going to explain why golf courses were turning out 265 00:17:19,920 --> 00:17:23,280 Speaker 1: to be one of the less obvious casualties of COVID ninety. 266 00:17:23,840 --> 00:17:27,080 Speaker 1: Our real estate reporter Alex Wittenberg in New York is 267 00:17:27,080 --> 00:17:31,040 Speaker 1: going to explain everything. Alex, um, what why is it 268 00:17:31,119 --> 00:17:34,920 Speaker 1: that the golf courses are disappearing at an increased rate 269 00:17:35,000 --> 00:17:39,719 Speaker 1: thanks to the pandemic. Yeah, so they're about There are 270 00:17:39,800 --> 00:17:42,320 Speaker 1: kind of two trends that are converging that make up 271 00:17:42,320 --> 00:17:44,600 Speaker 1: this trend we're seeing, and the first one has to 272 00:17:44,640 --> 00:17:48,639 Speaker 1: do with the decline in the rate of people playing golf. 273 00:17:49,320 --> 00:17:51,639 Speaker 1: So in the late nineties and early two thousand's a 274 00:17:51,680 --> 00:17:54,359 Speaker 1: lot of golf courses started to be built, and that 275 00:17:54,480 --> 00:17:56,440 Speaker 1: had to do with Tiger Woods coming on the scene 276 00:17:56,440 --> 00:17:59,760 Speaker 1: and becoming a sensation, and by most accounts today they 277 00:17:59,760 --> 00:18:03,359 Speaker 1: over built. So since around the mid odds there have 278 00:18:03,400 --> 00:18:08,440 Speaker 1: been more golf courses closed than opened and um since 279 00:18:08,480 --> 00:18:11,640 Speaker 1: around two thousand and six, two thousand four courses have closed. 280 00:18:12,280 --> 00:18:15,159 Speaker 1: So during the pandemic, we've seen a slight uptick in 281 00:18:15,200 --> 00:18:18,679 Speaker 1: the number of players playing golf, So there's around of 282 00:18:18,680 --> 00:18:21,000 Speaker 1: four increase in the number of rounds played and that 283 00:18:21,080 --> 00:18:22,800 Speaker 1: was the first time there was an increase in a while. 284 00:18:23,520 --> 00:18:28,160 Speaker 1: But still because of the you know, flood into the 285 00:18:28,240 --> 00:18:30,600 Speaker 1: e commerce space during the pandemic, so many people wanting 286 00:18:30,640 --> 00:18:33,040 Speaker 1: to shop online, not go out into physical stories and 287 00:18:33,119 --> 00:18:36,359 Speaker 1: not being able to. Developers have seen the kind of 288 00:18:36,400 --> 00:18:40,159 Speaker 1: decline of golf as an opportunity to get into a 289 00:18:40,240 --> 00:18:44,680 Speaker 1: sector that is um really booming because of the pandemic 290 00:18:45,440 --> 00:18:47,399 Speaker 1: and should we be And I bet some of the 291 00:18:47,440 --> 00:18:50,359 Speaker 1: people living near these golf courses complained when the golf 292 00:18:50,359 --> 00:18:52,320 Speaker 1: course arrived, and then they had no idea they could 293 00:18:52,320 --> 00:18:54,760 Speaker 1: be much worse. They could be just a gigantic cupboard 294 00:18:54,760 --> 00:18:56,840 Speaker 1: for Amazon. Is that what we're talking about, just big 295 00:18:56,880 --> 00:19:00,320 Speaker 1: wares is sitting on top of what we're greens. Yeah, 296 00:19:00,359 --> 00:19:02,440 Speaker 1: that's right, and it could be a real challenge when 297 00:19:02,680 --> 00:19:04,880 Speaker 1: the proposed development is close to where people live, because 298 00:19:04,880 --> 00:19:09,840 Speaker 1: people don't want big trucks driving through their streets throughout 299 00:19:09,840 --> 00:19:13,720 Speaker 1: the night, and that's often where they are. Yeah, because 300 00:19:14,480 --> 00:19:17,199 Speaker 1: usually golf courses are worth more when they're closer to 301 00:19:17,280 --> 00:19:21,280 Speaker 1: where people live, when they're in more affluent areas. In fact, 302 00:19:21,320 --> 00:19:23,840 Speaker 1: a golf course can actually bring up the price of 303 00:19:24,000 --> 00:19:27,120 Speaker 1: a home if there's a home nearby a course. So 304 00:19:27,320 --> 00:19:29,640 Speaker 1: there are a number of challenges to conversion. But this 305 00:19:29,720 --> 00:19:32,720 Speaker 1: is those big warehouses as usually what we're talking about. 306 00:19:33,119 --> 00:19:35,199 Speaker 1: So all those people who complain should now rush to 307 00:19:35,240 --> 00:19:37,200 Speaker 1: sign up to their local club to make sure it 308 00:19:37,280 --> 00:19:40,760 Speaker 1: stays there. In general, we've tended to think commercial real 309 00:19:40,880 --> 00:19:43,200 Speaker 1: estate is not done very well out of COVID nineteen. 310 00:19:43,280 --> 00:19:46,840 Speaker 1: Is this just one of the exceptions, Yeah, exactly. The 311 00:19:46,880 --> 00:19:50,280 Speaker 1: industrial space is an exception. Um. It actually had its 312 00:19:50,320 --> 00:19:54,120 Speaker 1: strongest year on record in and for the first time 313 00:19:54,160 --> 00:19:56,720 Speaker 1: ever at least since the you know, at least at 314 00:19:56,760 --> 00:19:59,720 Speaker 1: the end of investors had poured more money into the 315 00:19:59,720 --> 00:20:02,359 Speaker 1: ind real space then into the office space for the 316 00:20:02,400 --> 00:20:06,000 Speaker 1: first time, um, since we've been tracking it. So this 317 00:20:06,200 --> 00:20:08,439 Speaker 1: was an exception and a lot of that was driven 318 00:20:08,480 --> 00:20:11,119 Speaker 1: by the e commerce boom. And so that is just 319 00:20:11,160 --> 00:20:13,840 Speaker 1: like I mean, we know that people have assuming or 320 00:20:13,920 --> 00:20:15,879 Speaker 1: thinking now that a few people are going to be 321 00:20:15,880 --> 00:20:17,880 Speaker 1: working in offices, or they're going to work less time 322 00:20:17,880 --> 00:20:21,480 Speaker 1: in offices, um, but we surely are spending a lot 323 00:20:21,480 --> 00:20:24,600 Speaker 1: more online. You mentioned that there had been a massive overbuild, 324 00:20:24,600 --> 00:20:26,359 Speaker 1: and of course that's what happens in real estate all 325 00:20:26,359 --> 00:20:28,080 Speaker 1: the time. There's a long lead times and then you 326 00:20:28,160 --> 00:20:30,720 Speaker 1: end up having overdone it. I mean, this is it's 327 00:20:30,760 --> 00:20:33,359 Speaker 1: quite hard to reverse once you've dug up a golf course. 328 00:20:33,400 --> 00:20:34,760 Speaker 1: Do you think this is going to turn out to 329 00:20:34,760 --> 00:20:37,960 Speaker 1: be overkilled as well? Yeah, it might be. I think 330 00:20:38,080 --> 00:20:41,439 Speaker 1: there's already some expectations that the rate of growth that 331 00:20:41,520 --> 00:20:44,400 Speaker 1: we saw in is going to decline in this year 332 00:20:44,480 --> 00:20:47,080 Speaker 1: when people are starting to go back to shopping in person. 333 00:20:47,680 --> 00:20:49,720 Speaker 1: It's it's hard to say. I was on a call 334 00:20:49,800 --> 00:20:53,040 Speaker 1: with analysts from CBR not long ago and they seemed 335 00:20:53,160 --> 00:20:56,679 Speaker 1: very bullish about the growth of the market and beyond. 336 00:20:57,320 --> 00:21:00,119 Speaker 1: So I think some a place like a golf or 337 00:21:00,200 --> 00:21:03,159 Speaker 1: is it really depends as well on whether players are 338 00:21:03,200 --> 00:21:06,160 Speaker 1: going to stay. There are new players who, because they're 339 00:21:06,200 --> 00:21:09,440 Speaker 1: confined to their homes during the pandemic, didn't want or 340 00:21:09,440 --> 00:21:12,879 Speaker 1: didn't see many other options for being active and taking 341 00:21:12,920 --> 00:21:16,320 Speaker 1: up a sport. So if that trend does stay, then 342 00:21:16,960 --> 00:21:20,359 Speaker 1: maybe this is kind of an unwise investment at this point. 343 00:21:20,400 --> 00:21:22,920 Speaker 1: But I think most people are expecting that once other 344 00:21:22,960 --> 00:21:25,680 Speaker 1: activities become available, that the old trends are going to 345 00:21:25,720 --> 00:21:27,840 Speaker 1: come back, and that golf courses are not going to 346 00:21:27,880 --> 00:21:31,960 Speaker 1: be um as in demand as they once were. So well, 347 00:21:31,960 --> 00:21:34,320 Speaker 1: so that's again there's one piece of the market, many 348 00:21:34,320 --> 00:21:37,040 Speaker 1: pieces of the market where people are feeling bullish. Alex Whittenberg, 349 00:21:37,119 --> 00:21:45,480 Speaker 1: thank you very much. Thank you. So that's it for 350 00:21:45,520 --> 00:21:48,119 Speaker 1: this episode of Stephanomics. I'll be back next week with 351 00:21:48,160 --> 00:21:53,680 Speaker 1: a special conversation with the economist and sometime revolutionary Marianna Matsukata. 352 00:21:54,800 --> 00:21:57,640 Speaker 1: For more news and analysis from Bloomberg Economics during the week, 353 00:21:57,880 --> 00:22:00,520 Speaker 1: you can follow as Economics on Twitter, or you can 354 00:22:00,560 --> 00:22:04,280 Speaker 1: also find me on at my Stephanomics. This episode was 355 00:22:04,320 --> 00:22:07,359 Speaker 1: produced by Magnus Hendrickson, with special thanks to Tom Warlick, 356 00:22:07,680 --> 00:22:11,960 Speaker 1: Lizzie Burden, and Alex Wittenberg. Lucy Meekin is the executive 357 00:22:11,960 --> 00:22:15,280 Speaker 1: producer of Stephanomics, and the head of Bloomberg Podcast is 358 00:22:15,280 --> 00:22:16,200 Speaker 1: Francesco Leafy.