Tendency Surveys Discussion

Russia Business tendency surveys (BTS) or business climate surveys (BCS) with extensive coverage (by economic activity, ownership structure, region) Adopts harmonized system, international practices Confidence indicator for each sector anticipates well the economic activity of the sector Extending to more services (as exemplified by pilot services surveys)

Ukraine BTS well-established, conducted since 1997 and extended to non-financial services in 2010 Leading and coincident (synthetic) indicators compiled for each industry sector found to correlate well with the sector’s level of economic activity Assessment of cyclical synthetic indicators can be related to Ifo segmentation approach

China Introduces business climate survey as well as business climate index (BCI) BCI based on net balance weighted by primary operating revenue and by value-added Where sampling design is pps, weighting is not necessary BCI found to correlate well with GDP, and can also be used to predict GDP

Hong Kong Successfully compiled composite leading index (CLI) Uses GDP (instead of industrial production) as reference Requires high frequency indicators of good quality CLI includes one sentiment (tendency)-based indicator (which is PMI)

Lessons from Country Experiences Large numbers of country papers reflect interest in and need for timely and reliable forward looking indicators Despite being based on simple, qualitative information, data collected can be quantified through construction of diffusion or net balance indices Indices based on tendency surveys often have leading properties and therefore included in composite leading or cyclical indices