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FR: Industrial Production
| Actual | Previous | Revised | |
| Month over Month | -0.7% | 0.5% | 0.2% |
| Year over Year | -0.3% | 2.4% | 1.9% |
Highlights
Industrial production fell 0.7 percent month-on-month in February and contracted 0.3 percent from a year ago. The previous month's results were revised lower, with the monthly figure of 0.2 percent a downward revision from the 0.5 percent originally reported. The year-on-year figure for January, originally estimated to be up 2.4 percent, was revised to a gain of 1.9 percent.
Manufacturing output fell 0.4 percent from January, and was up 1.8 percent year on year. The manufacture of transportation equipment dropped 0.8 percent on the month, although 8.9 percent higher than a year ago.
Among the major industry groups, energy production fell 3.1 percent month-over-month and was down 0.7 percent from a year ago. This could reflect weaker industrial activity. One possible scenario is that production could increase next month and companies boost output in order to get ahead of price increases related to the conflict in the Middle East.
Intermediate goods output contracted 0.7 percent month-on-month, while capital goods output remained at the same level as in January. On a positive note, output of consumer durables increased 2.6 percent in February.
Taken together, the results for the first two months of the year for manufacturing could be charitably called stable. The March result will determine if industry has a positive impact on GDP. French businesses have been relatively positive on their outlook for the comping year, but that took a hit with the latest PMI result which showed a sector in stagnation.
Definition
Industrial production measures the physical output of the nation's factories, mines and utilities. Manufacturing is seen as the best guide to underlying developments as some sectors can be very volatile and cause misleadingly large short-term swings in total industrial 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 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. 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.