Industrial production bounced back well in February. Following a smaller revised 1.4 percent monthly fall in January, output rose 1.2 percent, easily beating the market consensus and lifting annual growth back above zero at 1.3 percent. Even so, the shortfall versus the pre-pandemic level in February 2020 still stands at some to some 4.2 percent.

Manufacturing also had a much better time of it, increasing a monthly 1.3 after a 1.5 percent drop at the start of the year. Transport equipment (5.6 percent) was especially robust and there were additional gains in food and drink (1.6 percent), machinery and goods (0.9 percent), coke and refined petroleum products (0.7 percent) and other manufacturing (0.4 percent). Construction (1.6 percent) also posted a solid rise.

February's bounce puts average overall industrial production in the first two months of the quarter 0.7 percent above the fourth quarter mean. Absent revisions, March will need a monthly fall of at least 2.6 percent to prevent the sector from contributing positively to real GDP growth. As such, today's data significantly increase the likelihood of the economy having expanded last quarter. To this end, the French ECDI (25) and ECDI-P (15) continue to show that that economic activity in general is running somewhat ahead of market expectations.

February production is expected to rebound 0.4 percent on the month after opening 2023 on an unexpectedly downbeat note, falling 1.9 percent in January.

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.