Monthly production data for South Korea show manufacturing rebounded sharply on the month in March, with conditions weakening in other sectors of the economy. In contrast, previously published PMI survey data showed that the manufacturing sector contracted for the ninth consecutive month in March, and at a sharper rate, with PMI data for April due to be published early next week.

South Korea's index of industrial production rose 5.1 percent on the month in March after falling 2.7 percent in February, with the index falling 7.6 percent on the year after a previous decline of 8.0 percent. Within the industrial sector, manufacturing output rose 5.7 percent on the month after a previous decline of 2.7 percent and fell 7.5 percent on the year after dropping 8.2 percent previously.

Growth weakened elsewhere in the economy. Output in the public administration sector rose 5.0 percent on the month after advancing 5.6 percent previously, while service sector output also recorded slower growth, up just 0.2 percent after a previous increase of 1.4 percent. Construction output contracted by 3.3 percent after advancing 5.6 percent previously. Aggregating across all industry, output rose 1.6 percent on the month in March after an increase of 0.7 percent in February, with year-over-year growth moderating from 3.3 percent to 2.2 percent.

Industrial production is expected to hold unchanged on the month in March versus a 3.2 percent decrease in February.

The industrial production index measures changes in the volume of industrial production with respect to the base year. The index charts the growth in production of each major industry and of the manufacturing sector. 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.

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 export-dependent economies. It 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. Detailed data in the report shows which sectors of the economy are growing and which are not.