Paul Wellener, Vice Chairman & U.S. Industrial Products and Construction Leader, Deloitte LLP, joins Yahoo Finance Live to talk about the 2022 outlook for the manufacturing sector, supply chain disruptions, and boosted employment numbers from the March jobs report.
Video Transcript
BRAD SMITH: Welcome back to Yahoo Finance Live, everyone. The monthly jobs report for March showed an increase of 431,000 jobs, with the manufacturing sector accounting for 38,000 of the roles filled during the month. In contrast, though, the number of quits in the sector, they have outpaced the job gains for the months where data is available. To add some context and insight to this conversation, let’s bring in Paul Wellener, who is the vice chairman and US industrial products and construction leader over at Deloitte. And also for the conversation, we’ve got Yahoo Finance’s Dani Romero. Great to have you both here for this discussion and this deep dive. Paul, just thinking about some of the job gains that we’ve seen in the sector, first and foremost, what have you seen from companies in differing their strategy to welcome and bringing employees back into the sector? PAUL WELLENER: Well, Brad, thanks for that question, and glad to be back here on Yahoo Finance and nice to see you again, both of you. And Dani, good to see you as well. You know, what I’m seeing companies doing, as it relates to the jobs gains, is, they’re trying to think about different populations. They’re trying to think about different avenues to connect with individuals in different marketplaces. Job hiring and job needs are hyper local when it comes to manufacturing. You can’t create a solution and that plays in Peoria, but doesn’t play in a metropolitan area. You have to create solutions that work in different places around the country. And we’re seeing manufacturers doing that across the board. But frankly, the gains aren’t enough. And we’re seeing outsized gains in some of the other sectors, which I think provides an opportunity for manufacturers. DANI ROMERO: And Paul, it’s Dani. So the pandemic really disrupted a lot of the logistics in the supply chain. Will reshoring of manufacturing jobs to other states really help the supply chain in the long run? PAUL WELLENER: Yeah, Dani, I think the reshoring efforts– and we sometimes think about it as either near shoring, so bringing things closer to the marketplace or bringing things back into the US marketplace. And those were trends that were starting well before the pandemic got started and really changed the way we think about supply chains. They got started even a decade or so ago when we had the Fukushima nuclear accident. And we’ve had issues with tariffs over the years. We’ve had weather related disruptions. And we even have the war going on in Russia and Ukraine right now. There’s a lot of things that have disrupted supply chain. So manufacturers are thinking about, how do they mitigate risk? And one way to mitigate risk is to bring things back to where they have a little bit more control over the supply chain, so bringing some of those things onshore. Now it’s going to exacerbate our problem, which is associated with the number of jobs that we need to fill here in the US. But in the long term, it can provide a lot of security to many of the organizations and bring those jobs back into the domestic marketplace. BRAD SMITH: When we think about manufacturing, it touches so many different industries. But for where we’ve seen investments from the White House and on the front of semiconductors and chips manufacturing even in the future, we know that there have been billions of dollars that have been earmarked for these efforts, both by the private and public sector. Where ultimately do you believe that the head count to fill these manufacturing roles is going to come from? And what type of skills training is going to be necessary to make sure that we don’t have lapses in the supply chain moving forward, as some of these positions are brought back domestically? PAUL WELLENER: Yeah, two great questions. First, where are they going to come from? So what we’re seeing in some of the quits numbers that got referenced is we’re actually seeing travel, hospitality, leisure, retail, the restaurant industry, even though they’re hiring at greater numbers, they’re having quits basically a little bit more than two times the quits rate of manufacturing. So that provides an opportunity for manufacturers to attract people who are not satisfied with their industries. Manufacturing these days still continues to provide higher wages than many of its competitor industries when you think about entry level jobs. It also provides an opportunity for long-term security, stability, wealth creation, in terms of benefits, in terms of paid sick leave, paid vacation, et cetera. So there’s some positives that we can see from manufacturing. In our recent study, we also saw that the perception of manufacturing is much more positive than it has been in the last five years. We saw the perception of manufacturing, and manufacturing being a technical, an innovative, a problem-solving industry, going up nearly 50% in five years. So we have over 64% of the population views manufacturing an attractive industry. I’ll say the other thing that probably even plays better into the long-term in filling some of those positions is that parents and the impact of parents on kids going into manufacturing has become much more positive, up also nearly 50% over the last five years. From 27% of the people in– parents in 2017, up to 40% of parents have a very positive view of manufacturing here in 2022. Now, to get at the second part of your question, which is a little bit around skills, you know, again, it’s not a peanut butter solution that we can spread across the country to create the right kind of skills and the right kind of niches in manufacturing. Because when you’re in a semiconductor facility outside of Columbus, Ohio, or you’re in a steel mill outside of Chicago, or you’re in an assembly plant in the Southeast for the automotive industry, you’re going to need a lot of different things from a skill standpoint. So we have to work with community colleges, we have to work with trade organizations. We’ve got to work with a lot of different constituents to build the right kind of skills into people in the marketplace, given we’re kind of at a tipping point from a manufacturing standpoint right now with the positivity that’s out there in the manufacturing marketplace. DANI ROMERO: And Paul, it’s Dani. We got 30 seconds to wrap this up, but I got one more– one more last quick question. So there’s a big push around electrical vehicles and the production around it. But considering our current climate, do you think that the US manufacturing industry is ready for that, and especially on the labor side? PAUL WELLENER: Well, again, it’s going to take specific approaches to helping create those jobs and create the workforce, in Michigan, in Ohio, in Tennessee, where many of the big EV plants have been announced. But I think we’ll be able to, as we pull together, we should be able to meet those needs. It’s just going to take a lot of different solutions in a lot of different places to be able to get there. BRAD SMITH: Paul Wellener, vice chairman and US industrial products and construction leader over at Deloitte, as well as Yahoo Finance’s own Dani Romero, appreciate the conversation today.
