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FR: Industrial Production
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | 0.2% | -0.2% to 0.2% | 0.1% | 1.0% | 1.4% |
| Year over Year | 2.9% | 0.9% | 1.3% |
Highlights
Industrial output expanded a seasonally adjusted 0.1 percent in April, slowing from a revised 1.4 percent in March (1.0), while expanding 2.9 percent year-on-year on an unadjusted basis, the fastest pace since 3.4 percent in September of 2022. The monthly result was slightly lower than the 0.2 percent median of an Econoday survey of economists' forecasts.
Output in the manufacturing sector increased 0.4 percent in April on an adjusted basis, extending the 1.3 percent gain in March. That is the first time since February and March of last year that the sector has racked up two consecutive monthly gains. Compared to the same time last year, output grew 2.64 percent after 1.68 percent the month before.
Transportation equipment production was a major contributor, rising 3.3 percent in April after 2.2 percent the month before, while gaining 14.1 percent year-on-year in March. Conversely, machinery and equipment output declined 0.4 percent in April after a 1.2 percent increase the month before as the production of computers, electronics and optical equipment fell by 1.7 percent after a 3.0 percent increase in March.
The production numbers are encouraging, particularly with two consecutive months of gains for the manufacturing sector. But the result comes with the caveat that production increases are coming largely due to the conflict in the Middle East which has induced businesses to increase orders on the demand side and ramp up output on the supply side.
Market Consensus Before Announcement
Output expected to show 0.2 percent increase in April from March after rising 1.0 percent in March from February.
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.