Industrial production rebounded in February but by slightly less than expected and was nowhere close to reversing January's slump. Output was up 0.8 percent on the month, a tick less than the market consensus and following a marginally shallower revised 3.0 percent drop at the start of the year. Annual workday adjusted growth was minus 6.4 percent, only a modest improvement on January's minus 6.6 percent decline.

February's partial recovery reflected monthly gains in intermediates (0.5 percent), capital goods (1.2 percent) and durable consumer goods (1.4 percent). Non-durables (minus 0.9 percent) and energy (minus 3.0 percent) both lost ground.

Regionally, the larger four member states all posted increases with France up 0.2 percent, Germany 1.1 percent, Italy 0.1 percent and Spain 1.3 percent. Most other countries similarly recorded gains.

However, despite its February advance, Eurozone industrial production remains on course to subtract from first quarter GDP growth. Absent any revisions, March will need a monthly jump of fully 4.0 percent just to keep the quarter flat. There are some tentatively promising signals in today's data notably the first back-to-back increase in intermediates in a year but the underlying picture of the region's manufacturing sector remains soft. To this end, with an RPI of minus 18 and an RPI-P of minus 2, overall Eurozone economic activity is also beginning to fall short of market expectations.

Production in February is expected to rise a monthly 0.9 percent after falling an unexpectedly steep 3.2 percent in January. Consensus for February's year-over-year rate is 5.7 percent contraction versus January contraction of 6.7 percent which was the lowest level of production since September 2020.

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.