Plus: Manufacturing M&As Increase, Jobless Claims on the Rise Again and Solid Growth Expected for Container Traffic.

OECD Forecasts Stronger Growth for Developed Countries
Growth for major industrialized economies is set to accelerate, although key differences in momentum remain between countries, according to the Organisation for Economic Development and Co-operation (OECD) last week.

The organization’s “composite leading indicators” of economic activity among its 33 members rose from a reading of 102.5 in November to 102.8 in December and “point to continued moderate expansion.”

The indicators for the United States, Germany and Japan suggest “relatively robust expansion,” while in Canada, France and the United Kingdom the indicators point to “continued moderate expansion,” the OECD said.

“There are nevertheless signs of a downturn emerging in Italy,” the organization said. “New data for China point to a downturn, reversing the tentative signs of regained growth momentum reported in last month’s assessment.”

In November, the OECD forecast that China’s economy would grow 9.7 percent in 2011, down from the 10.3 percent expansion it recorded in 2010. Separate data released last week showed China has overtaken Japan as the world’s second-biggest economy, with only the U.S. ahead of it.

“The OECD is predicting global growth of 4.2 percent in 2011, down from 4.6 percent in 2010, with wide variations in different countries’ outlooks in the wake of the global economic crisis,” Reuters reports.

Industrial M&As up in 2010
Merger and acquisition (M&A) activity among global manufacturing companies in the fourth quarter of 2010 showed significant improvement over the previous quarter and for the year as a whole in both deal volume and value, according to a PricewaterhouseCoopers (PwC) report last week.

The PwC report found that manufacturing M&A deals in Q4 2010 accounted for more than 40 percent of annual deal volume and nearly 45 percent of annual deal value. There were 52 deals equaling $22.6 billion for the quarter, the highest quarterly totals in both volume and value in three years. There were 129 deals total in 2010, up 37 percent from 2009, while overall deal value was $51.1 billion, up 125 percent from 2009.

Steady growth in mega-deal activity — defined as transactions worth $1 billion or more — was a major driver of M&A growth, with four deals valued at a total of $9.6 billion reported in the fourth quarter. There were 10 mega-deals in 2010 as a whole with a total value of $24 billion, nearly seven times the total value in 2009, when there was only one mega-deal reported.

Although deals involving U.S. manufacturing firms declined as a proportion of overall volume, two of the mega-deals last year were centered on U.S. companies. In general, North America remained a competitive region for M&A activity in 2010, with 13 deals in the fourth quarter and 41 deals in all of 2010.

“Though high levels of unemployment, concern over weak economic growth and European debt woes may continue to constrain investment, we believe buyers remain optimistic in their near-term economic outlooks,” Barry Misthal, U.S. industrial manufacturing leader for PwC, said in an announcement of the findings. “As we look at 2011, several indicators, including strong balance sheets, reduced costs and margin growth lead us to conclude that deal activity will continue to increase in the coming year.”

Jobless Claims Increase
New initial jobless claims rose in the latest week reported, according to the U.S. Department of Labor. Seasonally adjusted unemployment claims for the week ending Feb. 12 reached a total of 410,000, a 25,000 increase from the previous week’s revised total of 385,000 and the first rise in three weeks. The four-week moving average climbed to 417,750, a 1,750 increase from the prior week.

Although the number of new applications for unemployment compensation has fluctuated in recent months due to poor weather conditions and the holiday season, jobless claims have generally skewed downward since peaking at 500,000 last August. Despite the latest weekly increase, initial claims are near a two-year low. However, concerns remain over the pace of new job creation and the link between jobless claims and staffing increases.

“When the U.S. creates lots of new jobs, applications for jobless benefits typically fall below 400,000 for a sustained period. So far, faster job growth is not evident in monthly employment data,” MarketWatch reports. “The number of new jobs created over the past three months, for instance, has averaged 83,000, but that’s far less than what’s required to absorb just the natural growth in the working population.”

Solid Growth Expected for Retail Container Trafficc
Import cargo volume at major U.S-based retail container ports is expected to be up 11 percent year-over-year in February, and volume in the first half of 2011 should be up 6 percent over the same period in 2010, the National Retail Federation and Hackett Associates reported last week.

U.S. ports handled 1.14 million 20 ft. equivalent units (TEU) in December — the latest month for which actual numbers are available — representing the 13th consecutive month to show an annual gain after a 28-month stretch of declines that ended in December 2009, according to the two groups’ latest Global Port Tracker report. Even with the annual increase, Port Tracker shows the December total was down from November’s 1.23 million TEU, due to the end of the holiday season, and was up 5 percent from a difficult 2009.

The first half of 2011 is forecast at 7.3 million TEU, up 6 percent from the first half of 2010. That compares with 17 percent growth in the first half of 2010 over the first half of 2009. Last year, there were 14.7 million total TEU imports at the surveyed ports for a 16 percent annual gain over 2009, with 2009 checking in at 12.7 million TEU for its lowest level since 2003.

“The short-term indicators that drive our model suggest that there will be solid growth this year, but our caution is that the rate of growth seen in 2010 will not be repeated,” Ben Hackett, founder of Hackett Associates, said in a statement. “We are projecting that annual growth will be in the 7 to 8 percent range.”