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Definition: Industrial Production Index – IPI
It refers to an economic indicator used in the US, which measures the amount of output from manufacturing, mining, electric and gas industries and is released monthly by the Federal Reserve Board. The reference year for the index is 2002 and a level of 100.
Since GDP, Gross Domestic Product is a function of the output of an economy, IPI is a significant indicator for gauging the health of the economy. Production data in US is collated by the Bureau of Labor Statistics
It also has utility for investors. Investors can use IPI of different industries to examine the health of that particular industry. A growth in IPI suggests that the industry in questions is performing well. Corresponding to IPI, we have Index of Industrial Production(IIP) in India. It is compiled and released monthly by the Central Statistical Organisation(CSO). The base year for IIP is 2004-05.
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