IN: Industrial Production

Thu Feb 12 06:00:00 CST 2015

Consensus Actual Previous Revised
Change Y/Y 1.6% 1.7% 3.8% 3.9%

Industrial production was marginally softer than expected in December. Annual growth closed out the year at 1.7 percent, down 2.2 percentage points versus its November posting and its third weakest reading in the last four months.

Manufacturing slowed somewhat less quickly but at a 2.1 percent yearly rate, growth was still almost a full percentage point short of its mid-quarter outturn. Elsewhere, mining and quarrying dropped to a minus 3.2 percent rate while electricity weighed in at 4.8 percent. Over the fiscal year to date, overall industrial production was up a disappointingly sluggish 2.1 percent from the same period of FY2013/14 with manufacturing registering a still softer 1.2 percent pace.

Analysts and financial markets alike were highly dubious about the accuracy of the newly revised GDP figures even prior to the release of today's statistics. As it turns out, such scepticism now looks even more justified.

Industrial production index measures changes in the volume of production in the mining, manufacturing and electricity sectors. The data are not seasonally adjusted.

Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that will not lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios.

The index is a quantitative index with the production of the items being expressed in physical terms. The Index is compiled by taking into account the quantities of items produced during the current month, compared with the average monthly production in the base year. Selection of items is based on the total production of the items as the primary (main) product as well as secondary (by) product. Data are available monthly within six weeks of reference month.