• “Hundreds of IRS employees are skipping work. That could delay tax refunds.” (The Washington Post, subscription)
• “Trump won’t soften hardline on China to make trade deal: advisers” (Reuters)
• “Republican urges Trump to ‘jump start’ infrastructure push” (Roll Call)

The Shutdown and the Energy Sector

Will the government shutdown soon cut into oil and gas production? While many federal government operations that affect the industry are still chugging along, for now, some in the energy sector are worried that this state of affairs will end soon... because the shutdown looks like it won’t.

The Houston Chronicle takes a look (subscription). Here’s what the government is still doing:

• “While most of the Bureau of Land Management is closed, the agency says it continues to issue permits for oil and gas drilling on federal land. And under the Bureau of Safety and Environmental Enforcement’s shutdown plan, it will continue to inspect offshore oil rigs in the Gulf of Mexico.”

However:

• “Even as permits for near-term projects are issued by skeleton staffs at federal agencies, the harder work of assessing the effects of future projects on the environment, Native American sites and wildlife has come to a virtual halt within government offices, industry officials and attorneys say.”
• “The Bureau of Land Management has yet to delay any [federal] lease sales, with a big sale in Wyoming scheduled for next month. But Dan Naatz, senior vice president of government relations at the Independent Petroleum Association of America, said he wouldn’t be surprised if they were delayed.”
• “‘It’s that uncertainty that can really cast a long shadow as you’re trying to make investments, especially for our smaller companies,’ he said.”

And meanwhile, certain important operations have been shut down:

• “The U.S. Department of Transportation’s Maritime Administration, which oversees the permitting of deep water oil and natural gas import and export terminals, has been closed.”
• “That has put at least three proposed crude oil export terminals along the Gulf Coast in limbo, including an export terminal south of Galveston developed by Houston pipeline and storage terminal operator Enterprise Products Partners.”
• “Also, the Trump administration’s efforts to repeal Obama-era environmental laws has ground to a halt during the shutdown.”
• “With the Environmental Protection Agency closed, no employees are reviewing the thousands of comments on the administration proposal to rewrite regulations limiting methane regulations from oil and gas wells or to work on a proposal to roll back a sprawling water protection regulation.”

Here’s the latest from Washington: the Senate will vote this week on two bills that would end the shutdown, neither of them likely to succeed. Chance of further shutdown: 98 percent.  

But as they say, it’s tough to make predictions, particularly about the future. For a more optimistic view, you might want to watch yesterday’s CNBC interview with Carlyle Group’s David Rubenstein, where he predicted the shutdown will end “relatively soon.”

IMF Projects Weaker Global Growth

What’s the opposite of a growth spurt? Perhaps a growth sputter. If so, that’s what the IMF is predicting for 2019: not the definite coming of a global recession, but a likely weakening in growth. More from The Wall Street Journal (subscription):

• “The IMF cut its forecasts for world economic growth in 2019 to 3.5%, down from 3.7% forecast in October and 3.9% expected in July.”
• “A global recession isn’t around the corner, the IMF’s Managing Director Christine Lagarde told reporters at the World Economic Forum’s annual meeting in Switzerland on Monday. ‘But the risk of a sharper decline in global growth has certainly increased.’”
• “She cited in particular the threat of higher tariffs, which have already weakened financial markets globally.”

Let’s zero in on some specific countries, including our own:

• “The IMF’s forecast was pulled down in particular by poor economic performance out of Europe. Germany’s growth forecast for 2019 was cut 0.6 percentage points due to weak consumption and industrial production data; Italy was cut by 0.4 points due to weak domestic demand and high government borrowing costs and France was cut by 0.1 points due to the impact of ongoing street protests.”
• “The forecast was unchanged for the world’s two largest economies, the U.S. and China. But the IMF had previously forecast that both economies would slow—each by 0.4 points—in 2019 compared with the previous year.”

Skills of the Future

The division between creative and technical jobs is being eroded, according to a new report. Instead, the U.S. economy is likely to see strong growth in positions that require both skill sets.

More from The Wall Street Journal (subscription):

• “Jobs that tap both technical and creative thinking include mobile-app developers and bioinformaticians, and represent some of the fastest-growing and highest-paying occupations, according to a new report from Burning Glass Technologies, a labor-market analytics firm in Boston.”
• “The company analyzed millions of job postings to better understand the skills employers are seeking. What they discovered was that many employers want workers with experience in such new capabilities as big-data gathering and analytics, or design using digital technology.”
• “Such roles often require not only familiarity with advanced computer programs but also creative minds to make use of all the data.”
• “Burning Glass came up with the term ‘hybrid jobs’ to describe these kinds of positions, which require skills not normally found together.”

This segment of the job market is growing, and not only that, pays very well:

• “While Burning Glass forecasts overall job growth of about 10% between 2018 and 2028, the firm expects jobs that are the most hybridized to grow by 21%.”
• “What’s more, hybrid jobs pay more than positions that call for a traditional constellation of skills. For example . . . a customer-service manager who knows customer-relationship-management software can bump up his or her earnings by 22%, to $60,000 from $49,000.”

The report points out that many universities aren’t keeping up, maintaining the divisions among traditional fields and programs instead of encouraging overlap and creative recombination. The bottom line:

• “The educational sector may have to adjust further—these types of ‘hybrid’ jobs are generally best suited to workers with some experience, who may need further training to enhance their careers.”

Manufacturers are already thinking about these “hybrid” jobs of the future, and this report only confirms that they should keep doing so. Technological advances mean that workers can rely on new tools to take over some of their work, allowing them more room for creative thinking. Furthermore, the pace of technological advance means that lifelong learning will become ever more crucial, as the report suggests.

More good news on that front:

• “Manufacturers are increasingly partnering with local educational institutions to make sure tomorrow’s workers get their start early—in high school if not before—and have opportunities to advance their skill sets throughout their careers.”
• “To take just one example, a ‘STEM career pathway’ in Harrison County, Kentucky, public schools stretches from prekindergarten all the way through graduate school.”

And speaking of tomorrow’s manufacturers . . . .

Military Mojo in Manufacturing

Take a look at this heartwarming story from IndustryWeek about a machining equipment reseller that delights in hiring veterans—because they make such excellent workers. Here’s more:

• “In his experience, [CEO of CNC Machines Curt] Doherty has found one surefire way to get employees with the right set of skills to succeed in a demanding, highly versatile workplace: Check their military veteran status.”
• “Here’s the thing with veterans, Doherty says. ‘As long as you give them a clear mission and what their job title is, make sure they have the right training and support, they tend to be very self-sufficient.’”
• “Veterans, he observes, also have an embedded sense of selflessness. ‘They don’t just do it for commission,’ Doherty says. ‘[The work is] bigger than themselves. That comes hardwired from the military.’”
• “They are also hardwired for adaptability, which is vital in the machining world. Switching from Mazak to Fadal machines can be like learning a new language, Doherty says.”
• “Due to [veterans’] discipline and years of following instructions, learning new technology doesn’t become an impediment.”

The Manufacturing Institute’s Heroes MAKE America program allows other manufacturers to discover what Doherty already knows. (If you scroll down to the end of that article, you’ll find a link to an Institute video.)

The program, which provides departing service members with the training and certifications they need for new careers in manufacturing, had impressive success in placing its graduates in its inaugural year of 2018. Eighty-five percent of the Fort Riley program’s graduates found jobs, and the graduates of the more recent Fort Hood program are right on their heels.

• “Procter & Gamble earnings top estimates, with boost from price hikes; shares jump” (CNBC)
• “Alphabet CFO: Our AI is so good we can detect breast cancer with less data than ever” (CNBC)
• “Johnson & Johnson puts up strong profit and revenue in 4Q” (AP)
• “Toyota, Panasonic announce battery venture to expand EV push” (Reuters)
• “Boeing takes next step in developing Uber Air with first successful test flight of air taxi” (CNBC)
• “Waymo says it will build self-driving cars in Michigan” (Reuters)
• “GM bucks gloomy earnings forecast trend, shares jump” (Reuters)
• “IBM revenue beats estimates on strength in cloud, services businesses” (Reuters)
• “Aerojet RocketDyne’s manufacturing plant is nearing completion” (WAFF48)

• The NAM’s Manufacturers’ Accountability Project announces the addition of Phil Goldberg as Special Counsel.
• McClatchy cites NAM Vice President for Government Relations Jordan Stoick on the negative impact of the shutdown for manufacturers.
• The White House press office noted manufacturers’ record year in 2018 according to the NAM’s Manufacturers’ Outlook Survey.
• The Daily Caller quotes NAM Chief Economist Chad Moutray on the banner year for manufacturing in 2018.
• The Telegram & Gazette cites the recent Manufacturing Institute/Deloitte study on the skills gap.