Goods production posted a modest increase in April following a smaller, but still hefty, decline in March. Output was up 0.3 percent on the month, well short of the market consensus but after a significantly shallower revised 2.1 percent fall at quarter-end. Annual growth slowed from 2.1 percent to 1.8 percent and production was still some 4.4 percent below its pre-pandemic level in February 2020.

Manufacturing fared worse, posting a minimal 0.1 percent monthly gain largely on the back of strength in pharmaceutical products and pharmaceutical preparations (6.4 percent). However, motor vehicles and parts (minus 0.8 percent) continued to contract and engineering (minus 0.5 percent) was also soft. Overall capital goods decreased 0.3 percent and intermediates 0.2 percent but consumer goods edged 0.1 percent higher. Elsewhere, construction rose 2.0 percent but energy declined 1.5 percent.

April's limited rebound leaves industrial production 0.5 percent below its first quarter average and so on course to subtract from second quarter GDP growth. Indeed, with manufacturing orders so weak, the prospect of any significant improvement over coming months remains slim. Today's update puts the German ECDI and ECDI-P at minus 16 and minus 2 respectively showing that economic activity in general is running a little cooler than market expectations.

Industrial production in April is expected to rise 1.0 percent on the month following March's unexpectedly weak 3.4 percent monthly slump. The year-over-year comparion is seen slowing from 1.6 percent to 1.4 percent growth.

Industrial production measures the physical output of the nation's factories, mines and utilities. Data are collected from companies in the sector with fifty or more employees and include mining and quarrying, manufacturing, energy and, in contrast to its Eurozone counterpart, construction.

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.

Like the manufacturing orders data, the production index has the advantage of being available in a timely manner giving a more current view of business activity. Those responding to the data collection survey account for about 80 percent of total industrial production. Like the PPI and the orders data, construction is excluded.

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.