Plus: Jobless Claims Jump, Manufacturing Expansion to Slow and Materials-Handling Equipment to Grow.

OECD Projects Strong Economic Growth
Growth among many major industrialized economies is forecast to accelerate in the near future, although China may be facing a slowdown and concerns over Japan’s condition in the wake of several disasters last month are causes for concern, according to the Organisation for Economic Development and Co-operation (OECD) last week.

The OECD’s composite leading indicators (CLI) of business activity among the 33 member nations rose from a reading of 103 in January to 103.2 in February, the fourth consecutive month of 0.3 percent growth and 1.8 percent higher than the same month last year. These figures point to a faster rate of expansion in most OECD countries.

Indicators for the United States and Germany suggest “robust expansion relative to trend,” while France and Canada seem to have “regained momentum” and the United Kingdom continues to expand at a steady pace. However, the CLI for China points to “possible moderation” in economic activity, while India and Italy are facing outright slowdowns.

“China, which last year overtook Japan as the number-two economy, has already set a growth target of eight percent for 2011, and is aiming for seven percent a year from 2011 to 2015,” Agence-France Presse reports. “The organisation said it was not in a position to provide reliable estimates for Japan which is currently recovering from a devastating earthquake and tsunami which has left several economic unknowns.”

Manufacturing Expansion Slowing
Manufacturing growth is expected to continue in 2011, although the pace of expansion may slow later this year, according to the Manufacturers Alliance/MAPI’s latest quarterly Survey on the Business Outlook, published last week. The March 2011 composite index fell to 72 percent from 75 percent in the December 2010 report. This is the sixth consecutive quarter the index has been above the 50 percent threshold that separates expansion from contraction.

The current index reading is a dramatic improvement from the record-low 21 percent in the March 2009 survey, signaling that the manufacturing recovery continues.

In addition to the composite index, the survey includes 12 individual indexes. There were no dramatic shifts in most of the individual indexes between the December and March surveys.

“The results of the March survey show the indexes to be strikingly robust and relatively stable,” according to Donald Norman, MAPI economist and survey coordinator. “As such, they paint a clear and consistent picture of continued growth in manufacturing sector activity.”

The MAPI survey reflects the views of 67 senior financial executives representing a broad range of manufacturing industries.

Jobless Claims Surge
New initial jobless claims unexpectedly rose in the latest week reported, according to the U.S. Department of Labor. Seasonally adjusted unemployment claims for the week ending April 9 surged to 412,000, a 27,000 increase from the previous week and the highest figure in two months. The four-week moving average also rose, climbing 5,500 to 395,750.

The increase in unemployment claims came as a surprise, with economists surveyed by MarketWatch expecting new claims to drop to 380,000 for the week. Despite some fluctuations, weekly jobless claims have steadily fallen since August, dropping below the crucial 400,000 mark that indicates a healthy job market in early March.

Part of the leap in jobless claims may be attributed to seasonal factors as well as the volatility often seen near the end of a quarter due to the way benefits are measured between fiscal periods.

“A Labor Department spokesman said claims typically jump in the week following the end of a quarter,” MarketWatch explains. “Workers who wait to file in the next quarter sometimes can get higher benefits based on periodic adjustments in how they are calculated.”

Materials-Handling Equipment to Grow
After a 22.4 percent increase in 2010, orders for materials-handling equipment are forecast to rise between 11 percent and 12 percent over the next 18 months, the Material Handling Industry of America (MHIA) found. Shipments, which grew 6.1 percent last year, are expected to increase by as much as 13 percent in 2011/2012, according to the trade group’s latest quarterly Material Handling Equipment Manufacturing Forecast (MHEM), released last week.

“Industrial production activity is increasing and factory operating rates (utilization) are rapidly improving as demand is shifting from recovery mode to near normal levels,” Hal Vandiver, MHIA executive consultant, said in a statement. “MHEM will benefit from demand for more efficient use of capacity in warehousing, distribution and manufacturing in the near term and expanding residential and non-residential building sectors in late 2012/early 2013.”

Domestic demand (shipments plus imports less exports) in 2011 is expected to mirror shipment growth in 2010, when it grew 3.6 percent. The MHIA forecasts exports to be stronger than imports this year.