|Month over Month||0.2%||-0.3%||0.4%||0.5%|
|Year over Year||0.1%||1.5%||1.4%|
Industrial production (ex-construction) fell 0.3 percent on the month in April after a marginally stronger revised 0.5 percent increase in March. Annual workday adjusted growth was just 0.1 percent, down from 1.4 percent last time.
April's monthly slide was determined by a 1.2 percent fall in consumer goods (non-durables minus 1.7 percent) and a 1.3 percent drop in energy. Elsewhere the news was slightly more positive with a 0.1 percent increase recorded by both intermediates and capital goods.
Despite April's setback, industrial production at the start of the second quarter was still 0.2 percent above its first quarter mean. Business surveys in May were somewhat mixed with Istat's measure of manufacturing sentiment losing a little ground versus April but the sector PMI finding the strongest increases in output and orders since 2011. Overall the signs are that goods production should make a positive contribution to real GDP growth this quarter which, with services also expanding, would ensure a second successive quarterly increase in total output for the first time since Q1 and Q2 2011.
Industrial production measures the physical output of the nation's factories, mines and utilities. Approximately 4,300 companies provide data on more than 9,000 monthly flows of production.
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. Like the PPI and the orders data, construction is excluded from the data. This report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.
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