South Korea's industrial production fell 0.7% on the month in November after being flat in October, slipping 0.1 percent in September and surging 4.2% in August. The decrease was larger than the consensus call of a 0.5% dip. Factory output was nearly flat on the year, up just 0.1%, following a 6.3% surge in the prior month.

The Q3 GDP data showed that the Korean economy grew just 0.1% on quarter in the July-September period, rebounding from a 0.2% contraction. The slight growth was backed by government expenditures and private consumption.

Inflation in the country is expected to show a slight acceleration in December to 1.7% from 1.5% in November but that would remain comfortably below the Bank of Korea's 2% target. The central bank unexpectedly cut its policy interest rate by 25 basis points to 3.00% from 3.25% at its latest meeting on Nov. 28. Amid cooling inflation, the BOK had lowered the rate by 25 basis points to 3.25% in October after having left it at a restrictive level of 3.50% for 13th consecutive meetings.

Expectations for industrial production call for a decline of 0.5 percent on the month in November after no change in October.

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.