Industrial production continued to expand in February. A 1.5 percent monthly rise was well above the market consensus and the sector's best performance since last August. Following a stronger revised 1.0 percent increase in January, the latest gain saw annual growth climb from 0.9 percent to 2.0 percent, a 3-month high.

Furthermore, February's monthly advance was broad-based with all of the main output groups posting gains. Hence, capital goods were up fully 2.2 percent, intermediates and energy both 1.1 percent, consumer non-durables 1.9 percent and durables 0.2 percent.

Regionally, a 2.1 percent spurt in Germany did much of the work but there were rises too in France (1.1 percent) and Spain (0.6 percent). However, Italy (minus 0.2 percent) posted its fifth contraction in six months.

Today's update leaves Eurozone industrial production firmly on course to make a positive contribution to GDP growth this quarter. Absent any revisions, March would need a monthly fall of at least 4.5 percent to bring about a quarterly contraction. Moreover, today's surprisingly robust report boosts the region's ECDI to 9 and the ECDI-P to 25, both readings now signalling a (limited) degree of overall economic outperformance versus expectations.

Production in February is expected to rise 1.0 percent after climbing 0.7 percent in January. Consensus for the year-over-year rate is plus 1.7 percent.

Industrial production measures the physical output of factories, mines and utilities. The measure provided by Eurostat excludes the volatile construction subsector for which data are released a few days later.

Industrial production measures changes in the volume of output for the EMU's member states. The industrial production index provides a measure of the volume trend in value added at factor cost over a given reference period, excluding VAT and other similar deductible taxes. The preferred number is industrial production excluding construction. As with other EMU statistics, the data are provided by the national statistics offices to Eurostat (the European Union statistical agency) where it is combined to produce an overall output measure.

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.