Plus: U.S. Trade Gap Expands, Eurozone Manufacturing Output Surges and Materials-Handling Equipment Expected to Grow.

U.S. Trade Gap Widens in April
The United States trade deficit grew to $40.3 billion in April, a 0.6 percent increase over the revised $40 billion total in March and the highest deficit level in 16 months, according to the U.S. Department of Commerce on Thursday. April exports totaled $148.8 billion, while imports were valued at $189.1 billion.

The April goods deficit rose to $52.5 billion, a $0.1 billion gain over the previous month, but the services surplus decreased $0.1 billion to $12.2 billion. Exports of goods fell by $1.1 billion to $104 billion in April, and goods imports decreased $1 billion to $156.5 billion. The value of services exports grew to $44.8 billion, while services imports rose to $32.6 billion.

According to the Commerce Department, the monthly decrease in export goods was largely due to declines in “other goods” ($0.8 billion); consumer goods ($0.7 billion); and food and beverages ($0.6 billion). However, increases occurred in industrial supplies and materials ($0.6 billion) as well as automotive vehicles, parts and engines ($0.1 billion).

Although April’s findings indicate a slowdown in exports, which had risen most months since hitting a low last April, the continued widening of the trade gap indicates positive demand for U.S. products, particularly industrial supplied and manufactured goods.

“U.S. manufacturing has been a standout performer as the U.S. recovers from the worst recession in decades,” the Associated Press reports. “But the concern is that Europe’s debt crisis will slow growth in that part of the world and dampen demand in a key U.S. export market.”

Although the European debt crisis is likely to have a negative effect on the global economy, some experts believe its influence on trade flows is unlikely to hinder international commerce significantly for the time being.

“Analysts said the fall in exports in April was unrelated to the debt crisis in Europe, and predicted only limited impact on export growth from the austerity measures adopted by some governments in the region to slash huge budget deficits,” Reuters explains.

Eurozone Industrial Output Rises
Industrial production in the 16 countries using the euro grew for an 11th consecutive month in April, as seasonally adjusted output for the month expanded 0.8 percent from March, according to the European Commission’s statistical arm Eurostat.

Seasonally adjusted industrial output in April also gained 9.5 percent from a year earlier, “the sharpest year-to-year increase since records began,” the Wall Street Journal reports (subscription required).

“April’s euro-zone industrial production figures suggest that the recovery in the sector continues at a decent pace, despite the fiscal crisis in the region,” Capital Economics chief European economist Jonathan Loynes told the Journal. “No doubt the recent improvement in global economic activity is helping the euro-zone industrial sector, but the fall in the euro may also be helping.”

Germany, up 0.8 percent in April, is now up 13.9 percent over last year, “the highest in the eurozone,” the UK’s Financial Times notes (subscription required). Meanwhile, Greece fell 3.4 percent from March to April and 6.4 percent from the same period last year. “Ireland, Portugal and Spain still have lower industrial output than a year ago,” the Financial Times says.

Eurostat also revised its monthly estimate for March to reflect increases of 1.5 percent on the month and 7.7 percent on the year. Eurostat originally estimated that industrial production rose 1.3 percent from February to March and was 6.9 percent higher in March from a year earlier.

Continued Gains Expected in U.S. Manufacturing Production
American manufacturing production grew at an annual rate of 7 percent between February and April, according to the Manufacturers Alliance/MAPI’s new quarterly U.S. industrial outlook, a report based on analysis of 27 major industries. MAPI expects manufacturing industrial production to rise 6 percent overall in 2010 and 6 percent in 2011.

“A recovery is clearly well under way, and the industrial rebound is stronger than that in the general economy,” Daniel J. Meckstroth, chief economist for the Manufacturers Alliance/MAPI and the author of the analysis, said in an announcement of last week’s report, which noted moderate growth in consumer spending and a swing in inventories.

Production in non-high-tech manufacturing, which expanded at a 6 percent annual rate during the February-April period this year, is expected to increase approximately 5 percent both in 2010 and in 2011. High-tech industrial production, which rose at a 28 percent annual rate in the February-April period, is expected to post strong 18 percent growth in 2010 and 15 percent growth in 2011.

According to Meckstroth, 19 of the 27 industries analyzed are in the accelerating growth (“recovery”) phase of the business cycle; only one industry, private nonresidential construction, appears to be in the accelerating decline (either early recession or mid-recession) phase; and seven are in the decelerating decline (late recession or very mild recession) phase of the cycle.

“The manufacturing sector will show improvement in 2010, with MAPI forecasting 20 of 24 industries to show gains, led by iron and steel production with expected 54 percent growth and industrial machinery with 42 percent growth,” according to the announcement. “The recovery should continue in 2011 with growth likely in 22 of 24 industries, including nine industries which are predicted to grow at double-digit rates… .”

Materials-Handling Equipment Industry Expected to Grow in 2010
After a severe contraction of 37.4 percent in 2009, orders for materials-handling equipment are expected to grow between 6 percent and 9.5 percent this year, according to the latest forecast by the Material Handling Industry of America (MHIA).

“We continue to believe that demand created as the economy shifts from recession into recovery mode (filling supply chain pipelines, re-establishing inventories and responding to pent-up demand) is the principal impetus for improvement over the next few quarters in manufacturing, warehousing and distribution,” Hal Vandiver, MHIA’s vice president of business development, said in this month’s announcement of the findings.

The MHIA report also found that while materials-handling equipment shipments declined 34.4 percent in 2009, they are expected to grow between 1 percent and 2 percent this year. Domestic demand, which fell 34.7 percent last year, is also expected to grow 1 percent to 2 percent in 2010. Import and export rates are anticipated to rise at roughly the same rates this year.

“Later in the cycle, MHEM [the Material Handling Equipment Manufacturing forecast] will benefit from expanding residential and non-residential building sectors,” Vandiver added, “but not significantly until late 2011 or even 2012.”