Singapore industrial production fell at sharper pace in January, with output down 5.7 percent on the month after falling 1.3 percent in December. Previously published trade data showed a rebound in exports in January, while PMI survey data showed ongoing strength in the aggregate economy.

Yet in year-over-year terms, industrial production rose 1.1 percent in January after falling 2.4 percent in December, with this improvement largely driven by much stronger growth in the precision engineering and transport engineering industries. Output in the electronics industry, in contrast, fell 3.4 percent on the year after advancing 6.2 percent previously, while output in the biomedical industry continued to fall at a sharp pace. Excluding the biomedical industry, where output is often volatile, year-over-year growth picked up from an increase of 0.6 percent to an increase of 5.4 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.