Taiwan's industrial production index fell 1.10 percent on the year in February, weakening sharply after surging 15.98 percent in January. Output in the manufacturing sector fell 1.20 percent on the year after a previous increase of 16.63 percent, with today's data also showing a year-over-year decline in mining output and subdued growth in the utilities sector in February.

Volatility in year-over-year growth in industrial production in the first two months of the year largely reflects the timing of lunar new year holidays, which occurred in January last year but in February this year. This means the number of working days - and, as a result, the volume of output as well - were somewhat lower than they otherwise would have been in January 2023 but were at more normal levels in January 2024. Similarly, working days and output were at more normal levels in February 2023 but lower than they otherwise would have been in February 2024. This, in turn, means that year-over-year growth in output was somewhat stronger than it would otherwise be in January 2024 and somewhat weaker in February 2024.

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.