Singapore industrial production fell at a less pronounced pace in December, with output down 1.7 percent on the month after falling 8.0 percent in November. Previously published trade data showed weaker growth in exports in December, whereas PMI survey data showed ongoing strength in the aggregate economy. In year-over-year terms, industrial production fell 2.5 percent on the year in December after no change in November.

Excluding the biomedical industry, where output is often volatile, year-over-year growth slowed from an increase of 1.1 percent in November to an increase of 0.5 percent in December. Output in the electronics industry rose 6.3 percent on the year after advancing 5.1 percent previously, with output also growing at a stronger pace in the chemicals industry, falling at a less pronounced pace in the precision engineering industry, and weakening in the transport engineering and general manufacturing industries.

Industrial production in December, which in November rose 1.0 percent on the year, is expected to hold steady at 0.9 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.