Man­u­fac­tur­ing will take cen­tre stage in the glob­al eco­nom­ic watch this week, with the US pro­ject­ed to fare bet­ter than the rest.Or­ders for Amer­i­can-made cap­i­tal equip­ment such as com­put­ers and ma­chin­ery prob­a­bly climbed in March by the most in four months, econ­o­mist fore­cast an April 24 re­port will show.In the eu­ro zone, a re­port may in­di­cate fac­to­ries are grow­ing at a steady pace in April, while sim­i­lar fig­ures out of Chi­na will prob­a­bly sig­nal fac­to­ries in the world's sec­ond-biggest econ­o­my are pulling back, though not as se­vere­ly as in March.Else­where, Ger­man busi­ness con­fi­dence may have slipped in April, in­fla­tion in Aus­tralia at the start of 2014 prob­a­bly ap­proached the top of its cen­tral bank's pre­ferred range, and Brazil like­ly post­ed a cur­rent-ac­count deficit in March.

US durable goods

Book­ings for US durable goods, those made to last at least three years, climbed two per cent last month fol­low­ing a 2.2 per cent gain in Feb­ru­ary, ac­cord­ing to the me­di­an fore­cast of econ­o­mists sur­veyed by Bloomberg.Or­ders for non-mil­i­tary cap­i­tal equip­ment ex­clud­ing air­planes, which are con­sid­ered a proxy on the out­look for busi­ness in­vest­ment in such things as com­put­ers and ma­chin­ery, in­creased one per cent, the most since No­vem­ber, the sur­vey showed."The case for ac­cel­er­a­tion in in­vest­ment re­mains strong," Neil Dut­ta, head of US eco­nom­ics at Re­nais­sance Macro Re­search in New York, wrote in an April 17 note. "When growth picks up, in­vest­ment tends to rise some mul­ti­ple of the over­all growth rate. This is an im­por­tant in­sight. In­vest­ment is cycli­cal. You can­not be op­ti­mistic on growth with­out ex­pect­ing cap­i­tal spend­ing to re­bound."

For Brett Ryan, an econ­o­mist at Deutsche Bank Se­cu­ri­ties Inc in New York, one of the most im­por­tant in­vest­ment dri­vers is that ex­cess ca­pac­i­ty, or the amount of un­used fac­to­ry space and equip­ment, is dwin­dling.The ex­tent of po­ten­tial be­ing used at fac­to­ries, mines and util­i­ties in the US reached 79.2 per cent in March com­pared with an av­er­age 79.4 per cent since 1980, the Fed­er­al Re­serve re­port­ed last week. "The fact that ca­pac­i­ty util­i­sa­tion rose to a new, post-re­ces­sion high in March is a strong pos­i­tive for faster busi­ness in­vest­ment in the medi­um term," Ryan wrote in an April 17 note.

Chi­na man­u­fac­tur­ing

A gauge of Chi­nese man­u­fac­tur­ing prob­a­bly rose in April to 48.3 from 48 a month ear­li­er, ac­cord­ing to the me­di­an es­ti­mate of econ­o­mists sur­veyed by Bloomberg. Read­ings low­er than 50 sig­nal fac­to­ries are con­tract­ing.The pre­lim­i­nary read­ing of the Pur­chas­ing Man­agers' In­dex from HS­BC Hold­ings Plc and Mark­it Eco­nom­ics is due April 23.Why to ex­pect some sta­bil­i­sa­tion? An­nette Beach­er, head of Asia-Pa­cif­ic re­search at TD Se­cu­ri­ties in Sin­ga­pore, says the cor­re­la­tion be­tween man­u­fac­tur­ing in Chi­na and the price of iron ore is very strong. Re­cent gains in the met­al's price re­flect im­prov­ing de­mand as Chi­na fac­to­ries steady. "While 'cor­re­la­tion may not be cau­sa­tion,' we be­lieve it is worth keep­ing an eye on," Beach­er said in a re­port. "Af­ter falling an­oth­er eight per cent in March to an av­er­age of just un­der US$112/t (dry ton), the April iron ore price av­er­age so far is up five per cent to just over US$117/t." (Bloomberg)