Industrial production was a good deal stronger than expected in March. Following a steeper revised 1.0 percent monthly rise in February, output increased a further 0.6 percent. Annual workday adjusted growth climbed from minus 6.3 percent to minus 1.0 percent and, after taking on board earlier revisions, production has now expanded in four of the last five months.

However, growth came courtesy of the smaller member states as the larger four countries all recorded declines. Hence, France was down 0.3 percent, Germany 0.7 percent, Italy 0.5 percent and Spain 1.0 percent. This left Ireland (12.8 percent), where the statistics office is currently carrying out a review of its seasonal adjustment methodology, to shoulder much of the work.

Accordingly, the headline data probably flatter to deceive. Eurozone manufacturing may be over the worst but a full-blown recovery still looks some way off. As it is, the region's first quarter industrial production was 1.2 percent below its fourth quarter level. Still, today's updates put the Eurozone RPI at 36 and the RPI-P at 40. Both readings show economic activity in general running well ahead of market expectations.

Production in March is expected to fall a monthly 0.5 percent after rising 0.8 percent in February that, however, was nowhere close to reversing January's 3.0 percent decline. Absent revisions, March will need a monthly jump of fully 4.0 percent just to keep the quarter flat.

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.