JP: Industrial Production


Thu Sep 28 18:50:00 CDT 2017

Consensus Actual Previous
Month over Month 1.9% 2.1% -0.8%
Year over Year 5.4% 4.7%

Highlights
August industrial output was up 2.1 percent on the month and 5.4 percent from the same month a year ago. Expectations were for a monthly increase of 1.9 percent. Among the industries that contributed to the increase were general-purpose, production & business oriented machinery, transport equipment and electronic parts & devices. Industries that mainly contributed to a decreased production were chemicals (excl. Drugs), petroleum & coal products and non-ferrous metals.

Shipments were up a monthly 1.8 percent. Industries that comprised an increase in shipments were similar to those that affected output. They were general-purpose, production & business oriented machinery, transport equipment and iron and steel. Industries that contributed to a decrease in shipments were petroleum & coal products, textiles and electronic parts &devices.

Definition
Industrial Production measures the physical output of the nation's factories, mines and utilities. Factories manufacture various products, and the industrial production indexes have been prepared as a comprehensive indicator of wide-ranging production activities for such products and are regarded as some of the most important among economic indexes.

Description
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 won't 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.

Industrial production provides key industry data for this export-dependent economy. The data are issued twice a month-a preliminary estimate at the end of the month for the preceding month and a revised estimate about two weeks later. All products, whether sold domestically or abroad, are included in the calculation of industrial production. Industrial production is highly sensitive to the business cycle and can often predict future changes in employment, earnings and income. For these reasons industrial production is considered a reliable leading indicator that conveys information about the overall health of the economy. 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.