What is Industrial Production?

Industrial Production Definition. Industrial Production is a key economic indicator that is a released monthly by the Federal Reserve Board. It measures the total value of output produced by manufacturers, mines and utilities. This data point tends to mirror the expansions and contractions of the business cycle and can act as a leading indicator of economic growth, employment and personal income. Although these sectors contribute only a small portion of GDP, they are highly sensitive to changes in interest rates and consumer demand. This sensitivity makes Industrial Production an important tool for forecasting future GDP and economic performance. Central banks use these figures to measure inflation, as high levels of industrial production are a harbinger of higher levels of consumption and rapid inflation that may be difficult to control.

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