Industrial production performed much as expected in November. A 0.2 percent monthly rise was just a tick stronger than expected but failed to fully reverse a steeper revised 0.4 percent drop in October. Base effects saw annual growth deteriorate from minus 0.1 percent to minus 0.5 percent and production was still some 5.6 percent short of its pre-pandemic level in February 2020.

Manufacturing fared slightly better, increasing a monthly 0.5 percent on the back of a 1.1 percent increase in intermediates and a 0.7 percent gain in capital goods. By contrast, consumer goods fell 1.5 percent. Elsewhere, energy was up 3.0 percent but construction dropped 2.2 percent.

November's limited recovery puts average overall industrial production in the first two months of the quarter level with its third quarter mean. This leaves December just needing to avoid anything worse than a 0.1 percent monthly fall for the sector to add to quarterly GDP growth and suggests that any contraction in GDP last quarter will be only mild. However, with orders slumping a hefty 5.3 percent in November, near-term prospects for output remain grim. The German ECDI now stands at minus 14 and ECDI-P at exactly zero. In general, real economic activity is keeping up with market expectations while inflation has surprised on the downside.

Industrial production in November is expected to edge 0.1 percent higher after a 0.1 percent decline in October.

Industrial production measures the physical output of the nation's factories, mines and utilities. Data are collected from companies in the sector with fifty or more employees and include mining and quarrying, manufacturing, energy and, in contrast to its Eurozone counterpart, construction.

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 manufacturing orders data, the production index has the advantage of being available in a timely manner giving a more current view of business activity. Those responding to the data collection survey account for about 80 percent of total industrial production. Like the PPI and the orders data, construction is excluded.

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.