Industrial production staged a partial rebound in February. After a slightly shallower revised fall in January, output rose a modest 0.2 percent, undershooting the market consensus by 0.4 percentage points and reducing annual growth from 0.9 percent to minus 0.8 percent, its first negative print since last September. Indeed, production was still some 5.6 percent below its pre-Covid level.

With a 0.9 percent monthly advance, manufacturing fared rather better although this came nowhere close to reversing January's 1.5 percent drop. Machinery and equipment (1.3 percent) and the other manufacturing category (1.2 percent) both had a good month but transport equipment (minus 2.8 percent) was again very weak. Elsewhere, food and drink (1.1 percent) saw solid growth but there were hefty falls in mining and quarrying, energy, water supply and waste management (3.4 percent) and construction (2.1 percent).

February's limited recovery puts the 3-monthly change in industrial production at exactly zero but, revisions aside, leaves March needing a 1.2 percent monthly rise just to keep the first quarter flat. The sector remains weak. Today's report also puts the French RPI at zero but only due to the surprising weakness of prices at 17, the RPI-P shows a modest degree of overall economic outperformance versus expectations.

February production is expected to increase 0.6 percent after falling a much sharper-than-expected 1.1 percent in January, a month-over-month fall that was likely exaggerated by seasonal adjustment issues in December.

Industrial production measures the physical output of the nation's factories, mines and utilities. Manufacturing is seen as the best guide to underlying developments as some sectors can be very volatile and cause misleadingly large short-term swings in total industrial production.

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. Like the PPI and the orders data, construction is excluded from the data. 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. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.