Industrial production in November 2024 showed promising recovery, with a 1.5 percent month-over-month increase, 0.8 percent more than expected and reversing the revised October dip of 0.4 percent. However, year-over-year comparisons reveal lingering challenges, as production was 2.8 percent lower than November 2023. Over the three months (September to November), output was down 1.1 percent, reflecting cautious momentum in recovery.

Key sectors drove the positive results, with energy production surging 5.6 percent, construction growing by 2.1 percent, and other transport equipment (e.g., aircraft, ships, military vehicles) booming by 11.4 percent. Capital goods (1.4 percent), consumer goods (0.9 percent), and intermediate goods (0.5 percent) also contributed modestly.

Despite these gains, energy-intensive industries remain under pressure. While production rose 1.5 percent month-over-month, the three-month comparison shows a decline of 4.1 percent. Year-over-year, this segment was down 0.4 percent, underscoring sustained strain from high energy costs and input constraints.

The data reflects core manufacturing and construction resilience but highlights structural challenges, particularly in energy-dependent industries. Strategic measures to stabilise energy-intensive sectors may be pivotal in sustaining industrial growth through 2025. The latest update takes the RPI to 24 and the RPI-P to 10, meaning that economic activities are generally ahead of market expectations.

Output is expected to rebound by 0.7 percent on the month in November after declining 1.0 percent in October.

Industrial production measures the physical output of the nation's factories, mines and utilities. Data are collected from companies in the sector with fifty or more employees and include mining and quarrying, manufacturing, energy and, in contrast to its Eurozone counterpart, construction.

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 manufacturing orders data, the production index has the advantage of being available in a timely manner giving a more current view of business activity. Those responding to the data collection survey account for about 80 percent of total industrial production. Like the PPI and the orders data, construction is excluded.

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.