Singapore industrial production recorded slower growth in May, with output increasing 1.1 percent on the month after advancing 7.5 percent in April. Previously published trade data also showed weaker growth in exports in May, whereas PMI survey data showed improved conditions in the aggregate economy.

In year-over-year terms, industrial production rose 2.9 percent in May after falling 1.2 percent in April. This rebound in year-over-year growth was largely driven by the electronics industry, which accounts for nearly half of the sector, with output there surging 20.1 percent on the year after falling 1.1 percent previously. In the biomedical industry, where conditions are often volatile, output fell 42.6 percent after a previous decline of 27.7 percent. Output growth picked up in other parts of the sector. Excluding the biomedical industry, output rose 10.1 percent on the year in May after advancing 1.9 percent in April.

Industrial production in May is expected to increase a year-over-year 2.1 percent as is the monthly rate. These would compare with respective April rates of 7.1 and minus 1.6 percent.

The industrial production index measures changes in the volume of industrial production with respect to the base year. The index charts the growth in production of each major industry and of the manufacturing sector. Industrial Production measures the physical output of the nation's factories, mines and utilities. Factories manufacture various products, and the industrial production indexes have been prepared as a comprehensive indicator of wide-ranging production activities for such products and are regarded as some of the most important among economic indexes.

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.

Industrial production provides key industry data for export-dependent economies. It is highly sensitive to the business cycle and can often predict future changes in employment, earnings and income. For these reasons industrial production is considered a reliable leading indicator that conveys information about the overall health of the economy. 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. Detailed data in the report shows which sectors of the economy are growing and which are not.