Industrial production is a measure of output of the
industrial sector of the economy. The industrial sector includes
manufacturing,
mining, and
utilities. Although these sectors contribute only a small portion of GDP (
Gross Domestic Product), they are highly sensitive to
interest rates and consumer demand. This makes Industrial Production an important tool for
forecasting future GDP and economic performance. Industrial Production figures are also used by central banks to measure inflation, as high levels of industrial production can lead to uncontrolled levels of consumption and rapid
inflation.