Industrial production fell short of expectations in April. A 0.1 percent monthly dip followed a slightly smaller revised 0.5 percent advance in March and with base effects strongly negative, reduced annual workday adjusted growth from minus 1.2 percent to minus 3.0 percent.

The monthly setback reflected a mixed composition with gains in capital goods (0.7 percent), consumer durables and non-durables (0.3 percent and 3.4 percent respectively) just offset by falls in intermediates and energy (both 0.4 percent). Amongst the larger four member states, there were gains in France (0.6 percent) and Germany (0.3 percent) but Italy (minus 1.0 percent) lost ground for the third time in the last four months and Spain was only flat.

The April data leave Eurozone industrial production 0.3 percent above its average level in the first quarter and so in line with a gentle upswing. That said, following a 0.9 percent contraction in the first quarter and a 0.2 percent drop in the previous period, a meaningful recovery is still some way off. Today's update trims the Eurozone RPI to minus 19 and the RPI-P to minus 33. Both readings show recent economic activity in general running somewhat behind market expectations.

Production in April is expected to rise a monthly 0.1 percent after proving a good deal stronger than expected in March, rising 0.6 percent on the month.

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.