Monthly production data for South Korea show renewed weakness in the manufacturing sector in April, with output also falling on the month in other sectors of the economy. Previously published PMI survey data showed that the manufacturing sector contracted for the ninth consecutive month in April, but at a less pronounced rate, with PMI data for May due to be published later in the week.

South Korea's index of industrial production fell 1.2 percent on the month in April after increasing 5.3 percent in March, with the index falling 8.9 percent on the year after a previous decline of 7.6 percent. Within the industrial sector, manufacturing output fell 1.2 percent on the month after a previous increase of 5.6 percent and fell 9.0 percent on the year after dropping 7.7 percent previously. The manufacturing sector has contracted in five of the last six months.

Growth was also weak elsewhere in the economy. Output in the public administration sector contracted very sharply, down 12.4 percent on the month after advancing 4.7 percent previously, while service sector output fell for a second consecutive month, down 0.3 percent after a previous decline of 0.5 percent. Construction output, in contrast, rebounded with an increase of 1.2 percent after falling 4.3 percent previously. Aggregating across all industry, output fell 1.4 percent on the month in April after an increase of 1.2 percent in March, with year-over-year growth weakening from an increase of 2.0 percent to a fall of 0.8 percent.

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.