Business indicators are a series of variables that refer to the economy. Which provide reliable information on the situation and prospects for economic activity.
These indicators allow us to get an idea of the economic reality in its different aspects. In this sense, be it prices, production level, labor market, imports, exports, the public sector and the monetary and financial sectors.
Characteristics of the short-term indicators
The short-term indicators have the following characteristics:
- Periodicity: They must include a certain period of time and have a wide frequency. They are generally monthly, although indicators can also be used on a weekly, ten-year or even daily basis.
- Time lag: The information they offer must be up-to-date.
- Disaggregation: The data must be presented sufficiently disaggregated to allow detecting behaviors in the period of time considered.
- There must be a strong link between the economic indicator and the variable they represent.
- They must be reliable.
Types of economic indicators
There are various types of economic indicators. Among them, the following should be highlighted:
- Qualitative and quantitative: Most economic indicators are quantitative, that is, they are expressed in physical or monetary units. On the other hand, there are qualitative indicators obtained through opinion and expectations surveys. Among the qualitative indicators we can find confidence indicators such as the Business Climate Index and the Economic Sentiment Indicator.
- Compounds or synthetics: These are indicators that, in turn, include several partial indicators. A clear example of a synthetic indicator is the Human Development Index, which adds three elements: healthy life, education, and a decent standard of living.
- Leading and lagging indicators: Leading indicators allow predicting the evolution of an economic variable. On the contrary, lagged indicators allow us to know what has happened to the economy in the past and serve to confirm forecasts.
- Indicators according to the sector or aspect of the economy:
- Of employment.
- From the monetary and financial sector.
- Of prices.
- Internal demand: private consumption, investment and public consumption.
- Supply indicators for the agricultural and livestock sector, the industrial and construction sectors and the services sector.
Tags: passes banks biography