Industrial production was surprisingly weak in April, recording a sizeable 1.0 percent drop following an unrevised 0.5 percent fall in March. This was the third decrease in the last four months but, with base effects positive, still small enough to lift annual workday adjusted growth from minus 3.2 percent to 2.9 percent, a 4-month high.

April's monthly setback was quite broad-based with capital goods (minus 0.1 percent), intermediates (minus 1.2 percent) and energy (minus 2.1 percent) all posting declines. Consumer goods were only flat.

Today's update leaves overall goods production 1.4 percent below its first quarter average and so on course to make another hit to GDP growth. That said, with the sector PMI (54.2) well above the 50-expansion threshold in May, prospects for the rest of the second quarter may be rather better. The Italian RPI now stands at minus 19 and the RPI-P at minus 17, both measures indicating a modest degree of overall economic underperformance.

Italian industrial production is forecast to post a slight 0.2 percent rise on the month in April after marking a surprisingly weak 0.5 percent decline (consensus was a 0.3 percent gain) in March and being flat in February. From a year earlier, output is seen down 2.1 percent after falling 3.5 percent in March.

Industrial production measures the physical output of the nation's factories, mines and utilities. Construction is excluded. Approximately 4,100 companies provide data on more than 8,000 monthly flows of 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 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. 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.