Tendency Surveys terminology Rosa Ruggeri Cannata – Eurostat Third International Seminar on Early Warning and Business Cycle Indicators 17 – 19 November 2010, Moscow

Tendency Surveys terminology Tendency Surveys qualitative information from individuals and company managers about the financial and economic situation of their household or their business in the following sectors: –Industry –construction –retail trade –services –consumers –special surveys: investment Possible extensions –agriculture –energy

Tendency Surveys terminology A way to synthesise the information at sector level: Confidence Indicators Aggregating answers by balances Selection of component series –standard set of components for individual countries or –aggregates or more representative series for individual countries Weighting of component series –different weights –equal weights for individual components or aggregates –Information on the economic development by sector Industrial confidence indicator: arithmetic average of balances to questions on: –Order books –Stock of finished products –Expectation on production

Tendency Surveys terminology A way to synthesise the cross-sectoral information: Sentiment Indicators Integration of information coming from different sectors comparability of series: standardisation ESI: five surveyed sectors are aggregated to track GDP growth at Member State, EU and euro area level Obtained by standardised individual components of confidence indicators with different weights: (Industry 40%, Services 30%, Consumers 20%, Construction 5% Retail trade 5%)

Tendency Surveys terminology Climate indicators Sectoral or general level Based on qualitative information Representing the underlying cyclical situation at a particular moment Based on more sophisticated methods Examples: –European Commission BCI for euro area –IFO Business Climate for economic development in Germany –French business climate

Tendency Surveys terminology A sector climate indicator: The BCI for the euro area European Commission Business Climate Indicator for the manufacturing sector in the euro area Five balances of opinion from the industry survey: production trends in recent months, order books, export order books, stocks and production expectations factor model-based using the results of the industry survey designed to assess cyclical developments in the euro area

Tendency Surveys terminology Ifo World Economic Climate The Ifo World Economic Survey (WES) assesses worldwide economic trends by polling transnational as well as national organizations worldwide about current economic developments in the respective country WES is designed to give an accurate picture of the economic situation and forecasts for important industrial, emerging and developing economies on a quarterly basis individual replies are combined for each country without weighting Replies are “graded” Within each country group or region, the country results are weighted according to the share of the specific country’s exports and imports in total world trade Euro area Economic Climate: The Ifo World Economic Climate for the 16 member countries of the euro area is the arithmetic mean of the assessments of the general economic situation and the expectations for the economic situation in the coming six months