Singapore industrial production stagnated in September, with output flat on the month after increasing 6.9 percent in August. Previously published trade data also showed more moderate growth in exports in September, whereas PMI survey data showed ongoing strength in the aggregate economy.

In year-over-year terms, industrial production rose 9.8 percent in September after increasing 22.0 percent in August. This moderation in year-over-year growth was largely driven by the electronics industry, which accounts for nearly half of the sector, with output there increasing just 1.9 percent on the year after increasing 50.0 percent previously. The large increase in August was partly driven by base effects from weakness in semiconductor production twelve months earlier. In the biomedical industry, where conditions are often volatile, output surged higher with an increase of 62.0 percent after a previous decline of 16.1 percent. Output growth was mixed in other parts of the sector. Excluding the biomedical industry, output advanced 4.5 percent on the year in September after increasing 28.5 percent in August.

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.