Industrial production lost further ground in November A 0.3 percent monthly fall was in line with the market consensus but, following an unrevised 0.7 percent drop in October, means that output has declined in five of the last six months. Annual growth was minus 6.8 percent, down from minus 6.6 percent and production now stands at its lowest level since October 2020.

The latest setback was led by durable consumer goods which fell a monthly 2.0 percent. Capital goods also decreased 0.8 percent and intermediates 0.6 percent. Only partial offsets were provided by consumer non-durables (1.2 percent) and energy (0.9 percent).

Regionally, France (0.5) and Spain (1.1 percent) both saw a first increase in four months but there were fresh loses in Germany (0.3 percent) and Italy (1.5 percent). Elsewhere, the majority of member states also posted declines.

The latest data put average Eurozone industrial production in October/November some 1.2 percent below its mean level in the third quarter and so suggests that the sector will again weigh on economic growth in the current period. Absent any revisions, December will need an improbably steep 3.8 percent monthly spurt just to keep the quarter flat. Accordingly, all the signs are that goods production ended 2023 on a particularly weak note. Still, today's report only trims the Eurozone RPI to 3 and the RPI-P to 12. Overall economic activity is still just about beating market expectations.

Production in November is expected to fall a further 0.3 percent after dropping an unexpectedly deep 0.7 percent in October. Consensus for November's year-over-year rate is contraction of 5.3 percent versus October contraction of 6.6 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.