Industrial production collapsed at quarter-end. A 4.1 percent monthly nosedive was much steeper than the market consensus and the worst performance by the sector since April 2020 in the midst of the Covid crisis. Annual growth slumped from 2.0 percent to minus 1.4 percent, only its second sub-zero print since July 2022, and output stood at its lowest level since October 2021.

Headline weakness was largely attributable to capital goods which shrank fully 15.4 percent on the month. That said, there were also declines in intermediates (1.8 percent), consumer non-durables (0.8 percent) and energy (0.9 percent). The only category to register a rise was consumer durables (2.8 percent).

Regionally, most member states saw monthly falls, notably Germany (3.1 percent). France (minus 1.1 percent) and Italy (minus 0.6 percent) similarly lost ground but Spain (1.4 percent) bucked the general pattern with a second successive gain.

The March update leaves first quarter Eurozone industrial production down 0.2 percent versus the fourth quarter of last year. In other words, the sector subtracted from the period's GDP growth. Indeed, today's report must raise the risk of a downward revision to the minimal 0.1 percent quarterly rate shown in the preliminary flash data. The Eurozone goods producing sector is not as weak as the March report alone might imply but it is clearly struggling and the manufacturing PMI suggested no improvement in April. The region's ECDI now stands at minus 42 and the ECDI-P at minus 45. Both readings point to significant underperformance by economic activity in general.

Production in March is expected to fall 1.6 percent after rising 1.5 percent in February which was well above expectations. Consensus for the year-over-year rate is growth of 1.3 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.