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Speaker 1: This episode is brought to you by Nadex, the Binary

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Speaker 1: and may not be appropriate for all investors manufacturing. What

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Speaker 1: does it look like these days? Dying or on the

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Speaker 1: cusp of a renaissance? That's what we'll try to take

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Speaker 1: a part this week. Does anyone else pronounce it renaissances?

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Speaker 1: That just see you? Dan? I think it's to do

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Speaker 1: with that convict ship. Hi, and welcome back to Bloomberg Benchmark,

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Speaker 1: a podcast about the global economy. It is Thursday, November five.

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Speaker 1: I'm Tory Stillwell and economics reporter with Bloomberg News in Washington,

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Speaker 1: d C. And I'm joined by my colleagues and co

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Speaker 1: host Dan Moss, our executive editor for International Economics Average,

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Speaker 1: who is in New York today, and Akido, our editor

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Speaker 1: for a Benchmark in San Francisco. Hello, Hi, Hey, guys.

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Speaker 1: So Dan, I was scouring the internet one day when

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Speaker 1: I see this great article about how the Australian accent

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Speaker 1: as a result of like you guys drinking too much

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Speaker 1: when you first settled Australia, and that you guys speak

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Speaker 1: with just two thirds capacity, with one third of your

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Speaker 1: mouth muscles sedentary. There's a couple of versions of that.

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Speaker 1: One is that this is the kind of English that

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Speaker 1: convicts spoke in late eighteenth century. The other version is

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Speaker 1: when the first male convict ship arrived a few days

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Speaker 1: before the first female convict ship, they were all going crazy.

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Speaker 1: Then when the first female convict ship arrived to join

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Speaker 1: the first male convict ship, there was this massive, massive

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Speaker 1: night with rum and nothing was ever the same. Again,

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Speaker 1: it's fair to say that some of the first European

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Speaker 1: Australians were conceived that night. But that's an incredible story. Well,

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Speaker 1: moving on, I guess this is sort of related. Let's

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Speaker 1: talk about babies. This was the first piece of news

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Speaker 1: I saw when I woke up on Thursday morning last week,

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Speaker 1: and I was so stunned I think I audibly gasped.

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Speaker 1: China got rid of its one child policy last week,

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Speaker 1: so now Chinese families are allowed to have up to

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Speaker 1: two kids. And this is a big deal because, like

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Speaker 1: we mentioned in Our and Our China episode a few

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Speaker 1: weeks back, um our guests Kenneth Lieberthal mentioned the one

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Speaker 1: child policy as part of the reason why their their

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Speaker 1: population growth has been slowing, and why that that's fed

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Speaker 1: into overall growth of their economy. Population growth is slowing,

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Speaker 1: but what's happening with the part of the population that's

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Speaker 1: in the workforce that has in certain age groups already

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Speaker 1: begun to contract. And it's really consistent with one of

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Speaker 1: the things ken told us that day, which is this

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Speaker 1: image we've had for a long time of China as

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Speaker 1: this giant, giant, giant pool of workers. It's really increasingly

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Speaker 1: less true. In some ways, that policy became too successful

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Speaker 1: for its own good, because as the population has slowed

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Speaker 1: and the working age population has shrunk, wages in China

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Speaker 1: actually have been increasing, and for many manufacturing jobs, it

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Speaker 1: just doesn't make sense to be in China anymore. There

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Speaker 1: are other places you can go. Yeah, and from my

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Speaker 1: proach on our Economic Indicators team, the week has been

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Speaker 1: dominated by manufacturing data, and that leads nicely into our

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Speaker 1: topic for today's show sure does. On this show, we've

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Speaker 1: taught in previous episodes about the stronger dollar, We've talked

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Speaker 1: about China. We've even talked about robots are doing to

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Speaker 1: your job. We've touched on all these topics that affect

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Speaker 1: the manufacturing sector without talking and devoting a show too

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Speaker 1: well manufacturing itself. What does it look like these days?

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Speaker 1: Dying or on the cusp of a renaissance? That's what

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Speaker 1: we'll try to take a part this week. Does anyone

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Speaker 1: else pronounce it renaissanswers that just see you, Dan? I

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Speaker 1: think it's to do with that convict ship. Well, hopefully

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Speaker 1: by the end of this episode will have answered this

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Speaker 1: question of whether manufacturing even matters for an economy like ours,

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Speaker 1: for an an advanced post industrialized economy. I think some

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Speaker 1: of our listeners will be listening to this and think, gosh,

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Speaker 1: I'm a teacher or a firefighter, or a lawyer or

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Speaker 1: an app developer and manufacturing just sounds so twentieth century.

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Speaker 1: So will be digging into this question as well, and

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Speaker 1: we will also have a very special guest to tell

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Speaker 1: us a little bit more about it at the bottom

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Speaker 1: of the show, so stay tuned there. But first, things. First,

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Speaker 1: let's run through what the manufacturing data are saying currently.

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Speaker 1: So this week we got a couple of big pieces

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Speaker 1: of news, and I want everyone to put on their

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Speaker 1: nerd caps for a second. Mine is always on when

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Speaker 1: talking about economic indicators. But among the first day points

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Speaker 1: that where we get on the economy every month is

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Speaker 1: actually concentrated on manufacturing. It's called the Institute for Supply

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Speaker 1: Management Manufacturing Survey, and that name is so boring, but

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Speaker 1: the information that it has is very interesting. Basically, these

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Speaker 1: are just comments from purchasing managers in manufacturing, and you're

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Speaker 1: probably wondering what a purchasing manager is. Uh. Factories need

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Speaker 1: a lot of supplies to make what they make, and

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Speaker 1: purchasing managers are in charge of making sure they have

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Speaker 1: those supplies. So if managers think there's gonna be a

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Speaker 1: pickup in demand for whatever the factory makes, whatever widgets

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Speaker 1: they produce, they're gonna be making sure that they have

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Speaker 1: ordered more raw materials that they need to make them.

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Speaker 1: If they think there's gonna be a slowdown, they're gonna

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Speaker 1: they're gonna trail off their orders for those raw materials.

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Speaker 1: So these people are really at the helm of being

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Speaker 1: able to monitor factory activity. So it's a leading indicator exactly,

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Speaker 1: and the data goes back to so we've got a

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Speaker 1: lot of history to work with, which is crucial for

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Speaker 1: economic indicators. Every month, they mail up this questionnaire to

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Speaker 1: hundreds of their members and about twenty industries. These are,

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Speaker 1: you know, textiles, leather, plastics, producers, and they asked them

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Speaker 1: all these questions and all these like wonky things that

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Speaker 1: economists want to get super specific information on. But the

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Speaker 1: broad overarching index, it compiles the most important parts of

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Speaker 1: that survey. That's the number that we we really like

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Speaker 1: to look at first. And that index was little changed

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Speaker 1: at fifty point one for October, after fifty point two

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Speaker 1: in September. So a number over fifty means that it's expanding,

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Speaker 1: right exactly. It's good that it's over fifty, but it's

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Speaker 1: basically kind of neutral. To give you guys a little

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Speaker 1: bit more context, this main index was at fifty eight

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Speaker 1: point one in August of last year, and that was

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Speaker 1: right when the dollars started to go off on a tear.

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Speaker 1: And there's been a few swings, but for the most part,

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Speaker 1: it's just been a straight line down ever since then.

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Speaker 1: I think the good news about last month's number was

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Speaker 1: a lot of people thought that it was going to

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Speaker 1: dip below that fifty threshold Hockey. They thought it was

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Speaker 1: going to dip into contractionary territory. That would have been

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Speaker 1: very worrisome, but it kind of held on, so that

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Speaker 1: was actually a small positive thing. I guess if you

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Speaker 1: look at the market p m I number, that increased

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Speaker 1: the fifty four point one in October from fifty three

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Speaker 1: point one in September. So I guess manufacturing isn't completely

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Speaker 1: depressed right now, but it sounds like it's not doing

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Speaker 1: too well either. And just to put this into some

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Speaker 1: broader context tory, the Institute for Supply Lawn Management also

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Speaker 1: publishes a non manufacturing index. Tell us what happened to

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Speaker 1: that this month? Right, Well, so the services indexes nine

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Speaker 1: points higher than that factory gauge, and that's the widest

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Speaker 1: differential since two thousands, So that just really speaks to

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Speaker 1: how much better the services side the economy is doing

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Speaker 1: compared to the factory side. So we really live in

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Speaker 1: a services world, at least for this month. Right, So

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Speaker 1: let's talk about how manufacturing got this way. Uh, let's

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Speaker 1: start short term, how do we get here. Well, Tori,

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Speaker 1: you talked about the strong dollar right right exactly. We've

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Speaker 1: we've seen the dollar appreciating and that makes our goods

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Speaker 1: more expensive for people abroad who want to buy manufactured products.

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Speaker 1: And one of the reasons why the dollar has been

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Speaker 1: so strong recently is because other economies around the world

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Speaker 1: aren't doing that well. And so you see this real

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Speaker 1: slowdown and global demand, and that means us smaller market

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Speaker 1: for American manufacturers. And then we've also seen the energy

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Speaker 1: sector kind of throw a wrench in the manufacturing industry

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Speaker 1: as well. When oil prices plunge, it means that oil

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Speaker 1: companies don't really need to buy more heavy equipment. They

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Speaker 1: don't need to invest in more equipment to be able

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Speaker 1: to access that oil or energy or whatever they're mining

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Speaker 1: for um, So it hurts the factories that produced that stuff.

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Speaker 1: What about longer term, Dan, it's facing issues of technology,

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Speaker 1: it's facing issues of cost. You know, we've got this

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Speaker 1: global supply chain happening where a manufacturing company might happen

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Speaker 1: to be headquartered in the United States, but the components

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Speaker 1: for their product are manufactured in one country, they're assembled

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Speaker 1: in a second, then shipped to a third for export. Now,

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Speaker 1: that doesn't necessarily mean that American export as are dead

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Speaker 1: or American manufacturers are dead. It may mean they're not

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Speaker 1: doing the manufacturing and the exporting from the US. I'm wondering,

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Speaker 1: why do we care about manufacturing so much in the

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Speaker 1: first place if our future is in services. Part of

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Speaker 1: it this iconic grip it's got on the American imagination,

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Speaker 1: you know, Henry Ford and the tremendous industrialization we saw

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Speaker 1: in waves the nineteenth century, then again the conversion of

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Speaker 1: auto plants during World War Two to produce bombers and

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Speaker 1: tanks and planes that became the so called arsenal of democracy.

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Speaker 1: I think it's like farming in some ways. It has

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Speaker 1: this grip on people's psyche, this view of how they

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Speaker 1: feel about the country they're in, in the world they're in.

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Speaker 1: Some of this services stuff can sometimes seem a little ephemeral,

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Speaker 1: right right, Well, And to give you some context, manufacturing

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Speaker 1: now accounts for about twelve GDP. It was almost so

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Speaker 1: a big drop there. But I think to help answer

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Speaker 1: your question, ay, we should bring on someone who really

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Speaker 1: knows a lot more about the manufacturing industry. But first

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Speaker 1: dot com, Futures options and swaps. Trading involves risk and

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Speaker 1: may not be appropriate for all investors. Well, since none

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Speaker 1: of us on this show have actually held a manufacturing job,

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Speaker 1: we have a surprise guest on the line to share

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Speaker 1: her firsthand experiences. Hi. Mom, Hi, I'm good, Thanks for

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Speaker 1: joining us. Oh, you're welcome. Glad that I could do

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Speaker 1: it me too. We wanted to talk to you because

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Speaker 1: we thought you would just have really great personal experience

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Speaker 1: with the manufacturing industry and we just wanted to learn

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Speaker 1: a little bit more about it from you. So to start,

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Speaker 1: how long have you worked in manufacturing. Well, I have

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Speaker 1: been in manufacturing basically all my life. And we're gonna

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Speaker 1: say that's rough. Really, uh, forty three years I've been

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Speaker 1: in manufacturing. I went into manufacturing right after I graduated

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Speaker 1: from my school. And has that been in North Carolina

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Speaker 1: the whole time? Debbie, You've had a number of jobs, right.

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Speaker 1: Tory was telling us that you've worked at a bunch

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Speaker 1: of different factories before you actually started working at your

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Speaker 1: current company. Yes, I went into the manufacturing field. Was

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Speaker 1: in nineteen and seventy two. I went into furniture and

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Speaker 1: I worked in furniture for a few years, and then

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Speaker 1: I twitched Ubbord and went into the hushry textile area.

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Speaker 1: I did that and I was probably in the hushry

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Speaker 1: textile area about fifteen years. Then I decided to venture

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Speaker 1: out and try something different and I went into working

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Speaker 1: with a company that did security systems. That was with

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Speaker 1: that company about thirteen fourteen years aftil I left there.

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Speaker 1: I went on another adventure and I worked at a hospital,

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Speaker 1: and uh, I did two different things at that hospital.

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Speaker 1: One area I worked in the cafeteria and then another

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Speaker 1: area is I worked within the hospital itself in another

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Speaker 1: area doing housekeeping and stuff like that. But then after

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Speaker 1: I left there, I went in back into the manufacturing

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Speaker 1: fields and I went into automotives. I worked there for

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Speaker 1: about two years, and then now I am working in

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Speaker 1: heavy equipment hydraulic maintenance. So one of the things we've

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Speaker 1: talked about on this show is not just how manufacturing

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Speaker 1: has changed, but how proportionately it accounts for a small

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Speaker 1: share of the American workforce than it really does. Have

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Speaker 1: you noticed that playout in your life and in the

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Speaker 1: careers of your college. Oh? Yes, especially the area that

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Speaker 1: Toy was born and raised. Then it's a little small

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Speaker 1: rural area and picker in North Carolina. It is a

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Speaker 1: very important part because that is the main uh sence

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Speaker 1: of the majority of the people's income there, especially the

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Speaker 1: people my age and maybe the next generation down. That

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Speaker 1: was basically the thing they've done. They went, they went

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Speaker 1: to school, they graduated from high school, they got married,

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Speaker 1: they got a job, they got married, they had children,

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Speaker 1: and back in two thousand eight nine, whenever the job

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Speaker 1: market really drops, I had I've seen personally a lot

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Speaker 1: of people lose their homes, lose everything they had because

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Speaker 1: they lost their job. At a point when Tory was

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Speaker 1: still in high school. I lost my job and I

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Speaker 1: wasn't without a job for several months without a jobs. Thankfully,

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Speaker 1: we had a place to stay. But I've seen a

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Speaker 1: lot of people lose their homes, and it was basically

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Speaker 1: because of the furniture we in the area that we

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Speaker 1: live in, Hugh cre is a big furniture market area,

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Speaker 1: and a lot of the furniture companies had quit, had

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Speaker 1: closed their doors, moved to Mexico, China, wherever, and people

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Speaker 1: didn't have jobs. And there were a lot of those

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Speaker 1: people that worked there for all their lives. I mean

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Speaker 1: sometimes some people had worked our thirty five years, that's

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Speaker 1: the only job that they ever had. Thank goodness, were

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Speaker 1: past the depth of two thousand, two thousand and nine.

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Speaker 1: But on the ground, how much of a substantial or

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Speaker 1: if any return to pre two thousand and eight has

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Speaker 1: there been? Have most of the people who you mentioned

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Speaker 1: found other jobs, have jobs at those same places come back,

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Speaker 1: or have new employers moved in. Well that some new

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Speaker 1: companies have moved in. Not very many of the all

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Speaker 1: factories have moved back. There's a few that have came back,

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Speaker 1: but mostly everybody else has went to another field. Like

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Speaker 1: and olso the textile, the hosi business that really drops

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Speaker 1: during that time, and we really don't have a lot

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Speaker 1: of textiles and hosie around here anymore. But a lot

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Speaker 1: of places offered the people to go to school. And

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Speaker 1: we had a program during that with the Unemployment Commission

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Speaker 1: that the Employment Commission that we could go to school

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Speaker 1: if you if you chose to just lant a new trade.

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Speaker 1: And a lot of people did that. But and then

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Speaker 1: there's there's others that just feeling they didn't do theydn't

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Speaker 1: do anything, you know, so right now they're still out

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Speaker 1: there trying to find a job. I think, Mom would

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Speaker 1: be really interesting to hear sort of what a typical

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Speaker 1: day for you is like, because I'm not sure that

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Speaker 1: too many people know. You know, what it's like to

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Speaker 1: work in a factory. Um, what's it? What's it like

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Speaker 1: for you as a as a factory worker? In my position,

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Speaker 1: I'm a kind of a supervisor overseer over a production

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Speaker 1: area in the in the company that I work for,

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Speaker 1: and I just have to go in every day and

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Speaker 1: I've got to make sure that all of the I

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Speaker 1: have all these the products the supplies that I need

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Speaker 1: to make our our products. UH. In the meantime, while

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Speaker 1: I'm doing this, I'm also running different kind of machinery

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Speaker 1: that we have to do, and it's constant all the time,

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Speaker 1: something to do. It's fast paced, and you've got age.

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Speaker 1: You can't be fast with your job. You're not gonna

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Speaker 1: make it there along because they want people that that

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Speaker 1: have space and are interested in London and want to learn.

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Speaker 1: You know, Debbie, it was so interesting listening to you

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Speaker 1: talk about all the different jobs that you've held that

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Speaker 1: you moved from furniture to textiles, to autos to now

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Speaker 1: heavy equipment, because that's really a story of the shifts

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Speaker 1: in American manufacturing over the last few decades. You can

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Speaker 1: really see this move from UH less profitable, lower value

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Speaker 1: added UM industries to UH something like heavy equipment that's

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Speaker 1: a lot more profitable and involves higher technology. I guess,

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Speaker 1: but I was wondering, did you ever have to go

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Speaker 1: back to school to transition between these jobs or get

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Speaker 1: additional training? Personally myself, I have it, but I have

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Speaker 1: known people that how went back to school so they

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Speaker 1: can learn how to runch machines and stuff. And when

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Speaker 1: they've returned from school, have they kept their employment at

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Speaker 1: the same place. Yes, and they usually get a bit

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Speaker 1: of a real nice pay rate when they actively complete

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Speaker 1: their schooling, because that's why they send them to schools

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Speaker 1: to learn how to operate a very high tech machine.

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Speaker 1: Is the common person coming off the street can't run it,

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Speaker 1: and you have to go to school to to know

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Speaker 1: how to maintain, how to operate it, and everything about it. Dad,

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Speaker 1: we've been wrestling with two competing narratives. One says that

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Speaker 1: manufacturing in the US is back, there's this manufacturing renaissance.

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Speaker 1: Then on the other side of the fence, you've got

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Speaker 1: a school of thought that says manufacturing is really history

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Speaker 1: in the US. So from your perspective, which is true, Well,

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Speaker 1: from perspective, I believe it could be in the middle.

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Speaker 1: Right now, I think manufacturing is still a part of

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Speaker 1: our lives and in and it will be for a while.

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Speaker 1: But I think further on down the road to say,

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Speaker 1: like by the time maybe tories forty or so, maybe

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Speaker 1: when is that exactly, Let's say, five, ten or twenty years.

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Speaker 1: I'm not fifteen or twenty years down the road. Uh,

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Speaker 1: I could I could see it, Bason now, Well, Mom, yes,

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Speaker 1: thank you so much as anyone else have any other questions, Debbie,

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Speaker 1: I have one more question, how the skill of once attend?

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Speaker 1: How proud are you of Tori for being an internationally

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Speaker 1: famous podcaster? That would be a one chen very very

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Speaker 1: proud of Toy. I am so glad that she decided

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Speaker 1: to go to college and do what she does and

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Speaker 1: not be living there because her generations, the ones that

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Speaker 1: live there, they're falling in the same the same mode

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Speaker 1: that their parents and their grandparents are there out here

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Speaker 1: trying to find a factory job, you know. And that's

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Speaker 1: that's one thing I'm proud of about Tory. But when

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Speaker 1: Tori was a little girl, I came home one day

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Speaker 1: and she said, when I grow up, I'm not working

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Speaker 1: for Peanuts. And I said what, And she said, I'm

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Speaker 1: not working for Peanuts when I grow up. And she

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Speaker 1: followed her green and her boat. And I am very

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Speaker 1: proud of her. We're coming up to annual review time.

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Speaker 1: I'll keep I'll keep the I'll keep the Peanuts thing

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Speaker 1: in mind for Tories. I mean, just that laugh alone

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Speaker 1: is worth being proud of it. I don't believe there's

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Speaker 1: another Laft in the world like that. Laft. Well, thank

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Speaker 1: you so much for joining us today. It's been a

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Speaker 1: real privilege to have you on the show. Has been

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Speaker 1: a privilege to talk to you all too. All right, Mom,

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Speaker 1: love you, thank you, love you too, and talk to

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Speaker 1: you later. Okay. Bye. So I guess to answer your

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Speaker 1: question Aki, that you posed at the beginning of the show,

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Speaker 1: I would say, yes, manufacturing does still matter in America.

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Speaker 1: Thanks again for listening to Bloomberg Benchmark. We will be

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Speaker 1: back next week and until then you can find us

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Speaker 1: on the Bloomberg Terminal and Bloomberg dot com, as well

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Speaker 1: as on iTunes, pocket Cast, Stitcher, Google Play. And while

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Speaker 1: you're there, take a minute to rate and review the

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Speaker 1: show so more listeners can find us. And a very

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Speaker 1: special thank you to Debbie. Let us see what you

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Speaker 1: thought of the show. You can talk to us and

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Speaker 1: follow us on Twitter at Aki epos seven, Acrey still

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Speaker 1: Well and Daniel mass d C. Thanks again. We'll see

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Speaker 1: you next week, hopefully we can talk this one. PS

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Speaker 1: two pass by pas best pass stor