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IT: Industrial Production
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | -0.2% | -0.4% to 0.0% | 0.7% | 0.1% | 0.2% |
| Year over Year | 0.3% | 0.2% to 0.7% | 1.5% | 0.5% | 0.4% |
Highlights
Industrial production increased 0.7 percent in March after a revised increase of 0.2 percent in February while gaining 1.5 percent year-on-year following a 0.4 percent increase the month before. Economists were expecting a 0.2 percent decline in the monthly figure and a 0.3 percent year-on-year increase according to the median forecasts in and Econoday survey.
Transportation equipment output was the biggest contributor, rising 11.2 percent from March of last year, followed by mining and quarrying with 6.7 percent and a 6.1 percent gain in the manufacture of computers and electronic products.
The unexpected monthly increase is likely due in large part to the conflict in the Middle East, prompting businesses to increate orders and production to get ahead of further price increases and supply chain disruptions. This is borne out anecdotally in the PMI reports which have shown increased order books.
With the conflict now well into its third month with no sign of resolution, these decisions by companies are looking prescient. Still, the danger is that supply constrains will hinder future production. At the same time, factory gate prices are on the rise and unlikely to moderate anytime soon, and will likely start spilling over into the broader economy.
Market Consensus Before Announcement
Output expected down 0.2 percent on month and up 0.3 percent on year in March after rising 0.1 percent on month and 0.5 percent on year in February.
Definition
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.
Description
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.