Singapore industrial production rebounded sharply in June, with output increasing 5.0 percent on the month after dropping 3.6 percent in May. Previously published PMI data showed another month of solid expansion in Singapore's economy in June. Output fell 4.9 percent on the year in June after a decline of 10.5 percent in May.

The smaller year-over-year decline in June was largely driven by the electronics industry, with year-over-year growth in that industry falling 2.9 percent after a previous decline of 23.7 percent. Output also fell at a less pronounced rate in the chemicals industry. Offsetting these moves, output increased at a slower pace in the transport engineering industry, fell after a previous increase in the biomedical and general manufacturing industries, and declined at a faster pace in the precision engineering industry. Excluding the volatile biomedical industry, output fell 5.2 percent on the year in June after dropping 13.1 percent in May.

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.