Plus: Lending Picks Up, Robot Orders Jump and Industrial Manufacturing M&As Rise.

Leading Economic Indicators Rise in July
The Conference Board’s Leading Economic Index (LEI) for the United States climbed 0.5 percent to 115.8 in July, following a 0.3 percent drop in June and a 0.7 percent increase in May. Last week’s reported figures indicate key improvements in business activity amid a still-struggling economy.

“With the exception of the money supply and interest rate components, other leading indicators show greater weakness — consistent with increasing concerns about the health of the economic expansion,” Ataman Ozyildirim, an economist for The Conference Board, said. “Despite rising volatility, the leading indicators still suggest economic activity should be slowly expanding through the end of the year.”

Six of the 10 indicators tracked in the LEI improved last month: money supply, the interest rate spread, average weekly initial jobless claims, stock prices, manufacturers’ new orders for non-defense capital goods and manufacturers’ orders for consumer goods and materials. The largest negative contribution came from a drop in the supplier deliveries index.

Despite the positive signs, major concerns remain about the overall rate of economic growth in the U.S., apparent lack of momentum in key non-financial indicators and mounting market instability.

“Limited employment and income growth may keep consumer spending, which accounts for about 70 percent of the economy, from accelerating at the same time sentiment is depressed by a drop in stock prices,” according to Bloomberg News. “Federal Reserve policymakers said this month that the economic recovery is advancing ‘considerably slower’ than expected.”

Lending Picks Up in July
Banks have relaxed their lending standards as competition between financial institutions has increased along with demand for different types of loans, according to a Federal Reserve survey last week. Based on responses from 55 domestic banks and 22 U.S. branches of foreign banks, the report suggests continued improvement in lending conditions as we head into the third quarter, particularly among business customers.

“The most improvement came in lending to commercial and industrial customers as many businesses rebound from years of extreme caution,” the Wall Street Journal reports. “Large and middle-market companies saw standards ease the most as their demand picked up and banks competed aggressively for their business. Some banks also eased terms for small-business customers, though demand from those customers remained weak.”

Although the Fed’s findings indicate loosening credit as banks fight for new business, a trend that could “help cushion the economy from a renewed downturn,” the survey was conducted in July, before the recent financial turmoil and volatility began to affect Wall Street, the Journal notes.

Meanwhile, consumer lending and the housing market showed little signs of improvement.

North American Robot Orders Jump in First Half of 2011
Fueled by its best quarter in six years, the North American robotics industry surged 41 percent in the first half of 2011, new data from the Robotic Industries Association (RIA) indicate. According to the trade group late last month, a total of 8,879 robots valued at $577.8 million were ordered by North American companies during the first six months of 2011. Including units sold to companies outside North America, the totals are 10,476 robots valued at $667.9 million.

The second quarter was particularly strong, posting gains of 50 percent in units and 55 percent in dollars over the same period in 2010.

RIA President Jeff Burnstein attributes the bulk of growth to increased orders from automotive manufacturers and their suppliers. Robot orders to these customers rose 60 percent in the first half of the year. Non-automotive orders increased 23 percent through June, led by gains in metalworking (up 70 percent), while customers in food and consumer goods placed 60 percent more orders for robots in the second quarter of 2011 than in the first.

“The North American robotics industry is on pace for its best year since 2005 in terms of new order volumes…” according to Burnstein.

Industrial Manufacturing M&A Up in Q2
Global merger and acquisition (M&A) activity among manufacturing companies posted major increases in both volume and value of deals in the second quarter of 2011, according to a report last week from PricewaterhouseCoopers (PwC).

There were 46 deals worth more than $50 million in Q2, reaching a value of $18.6 billion during the quarter, up from 33 deals and marking a 70 percent increase in total value from $9.8 billion in Q1. Average deal value totaled $400 million, relatively unchanged from the previous quarter but up from $300 million in Q2 2010.

Smaller deals and transactions largely drove the increased M&A activity for the second quarter, although strategic investors also contributed to an increase in midsize and larger deals. There were also three so-called mega-deals worth a combined value of $7.7 billion in Q2, up from three mega-deals worth $4.4 billion in Q2 2010.

U.S. manufacturers dominated M&A activity in the second quarter among deals worth $50 million or more, accounting for 41 percent of total deal volume and 66 percent of total deal value. There were 19 large deals in the U.S. for the period, worth a combined $12.3 billion.