Industrial production had a very poor September. Output fell 1.1 percent on the month, some 0.3 percentage points steeper than the market consensus and easily more than reversing August's unrevised 0.6 percent gain. Annual growth slumped to minus 6.9 percent and production was left at its weakest level since June 2021.

September's monthly slide was broad-based with just capital goods (0.3 percent) recording a gain. Durable and non-durable consumer goods tumbled 2.1 percent while intermediates were down 0.3 percent and energy 1.3 percent.

Regionally, Germany (minus 1.6 percent) again dominated the overall monthly decrease but France (minus 0.5 percent) similarly lost ground and Italy (0.0 percent) was only flat. This left just Spain (1.0 percent) amongst the larger four economies to register an increase. Elsewhere, the majority of member states similarly posted fresh losses.

The latest setback leaves third quarter Eurozone industrial production 1.2 percent below its level in the previous quarter and so confirms a tidy hit from the sector on GDP growth. Soft business surveys for October also warn of another fall in output this quarter. Today's data put the Eurozone RPI at minus 5 and the RPI-P at minus 12, both readings pointing to a limited degree of overall economic underperformance.

Production in September is expected to fall 0.8 percent after rising 0.6 percent in August. Consensus for September's year-over-year rate is contraction of 6.3 percent versus August contraction of 5.1 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.