Industrial Production

Industrial production tracks the physical volume of goods produced in the manufacturing, mining, and electricity and gas sectors. It is one of the most timely indicators of economic activity, since it is published monthly, while GDP is usually published quarterly.

For example, if a country's industrial production index rises from 100 to 103 over a year, output in these sectors has grown by 3%.

Industrial production is closely watched because these sectors are sensitive to the business cycle. Factory output often falls early in recessions and recovers early in expansions, making it a useful coincident indicator.

In many developed economies, industry now makes up a smaller share of output than services, so industrial production gives only a partial picture of the economy. It remains important for understanding manufacturing-heavy economies and for tracking global trade and supply chains. In the United States, the Federal Reserve publishes the index alongside a measure of capacity utilization.