Industrial production ended 2022 on a surprisingly upbeat note. Following an unrevised 2.0 percent monthly rise in November, output increased a further 1.1 percent, easily beating the market consensus. The advance boosted annual growth from 0.7 percent to 1.4 percent, a 3-month high, but still left a 4.0 percent shortfall versus its pre-pandemic level in February 2020.

Manufacturing was rather weaker, gaining just 0.3 percent versus November when it rose a solid 2.4 percent. Coke and refined petroleum products (10.6 percent) again saw the largest increase but transport equipment (8.3 percent) and mining and quarrying, energy, water supply and waste management (6.0 percent) also had a very good month. Elsewhere, machinery and equipment fell 3.3 percent and food was off 1.7 percent but other manufacturing edged up 0.2 percent.

Despite December's increase, overall fourth quarter industrial production still declined 0.7 percent versus the previous period meaning that the sector subtracted from GDP growth. Still, at least manufacturing was up 0.2 percent and business surveys have been cautiously positive about January. In any event, today's update puts the French ECDI at minus 4 and the ECDI-P at 4. Both readings are close enough to zero to signal that economic activity in general is performing much as expected.

Production is seen up a monthly 0.1 percent after a 2.0 percent bounce in November.

Industrial production measures the physical output of the nation's factories, mines and utilities. Manufacturing is seen as the best guide to underlying developments as some sectors can be very volatile and cause misleadingly large short-term swings in total industrial 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 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. 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.