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NEWS & MEDIA
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e-forecasting's
Leading Economic Index (eLEI) e-forecasting Leading Economic Index (eLEI)
fell 0.4% in April 2013 to 95.9
(Graph: May 2, 2013)
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e-forecasting's LEADING INDICATORS:
US Leading Indicator
Monthly, Real-Time available the first working day each month with the reading of the previous month:
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State Leading Indicators
50 consistent state leading indicators to know what states lead or lag in the US business cycle:
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Global Leading Indicators
Indicators of future
business conditions for 35 countries, regional aggregates and an
overall worldwide leading index:
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Subscription (12 monthly reports) : $590
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THE CHALLENGE
Barometric Business
Forecasting: The Leading Indicators Technique
What are Leading
Indicators?
An indicator is any business or economic metric
(variable) believed to be informative about another metric of
interest to the decision-maker.
A leading indicator is a metric whose outcome is known in advance
of the metric the decision-maker wants to forecast.
THE ARCHITECTURE
Building Blocs Data:
Maintenance and real time availability of a global data warehouse
containing all relevant indicators that capture decision tools
available to market participants.
Target: Leading indicators are selected after the
metric to be forecasted - the target - is properly identified and
quantified. Targets of interest to decision-makers are either
macro-centric such as GDP, industrial, regional and statewide
metrics or, more desirably, company-specific metrics such as sales
of a product line.
Mining: Detection through an efficient mining process,
which implements criteria selection for target metrics from the
data warehouse by using a modern and advanced statistical
framework. Real time availability, high lead-time length and
historical consistency are cornerstones of selection criteria.
Assembling: The
collected set is then filtered, systemized and synthesized by
sophisticated algorithms to a composite leading indicator to be
ultimately used in business forecasting.
THE OPPORTUNITY
A composite forward-looking indicator is built to drive company
metrics, thus providing predictive intelligence of the current and
future state of the environment surrounding a market of interest.
The future influence of the composite
indicator on target metrics is known in advance, an advantage over
other forecasting techniques where it is necessary to first
generate forecasts for the drivers of the target. Forecast accuracy
with this technique is not based on forecast accuracy of drivers.
Barometric forecasting will only
provide reasonably accurate short-term forecasts. The forecast
horizon is limited to the length of the composite indicator’s
leading time.
Indicator based
forecasting is the best available forecasting technique to identify
future turning-points in the behavior of a target metric. Leading
indicators are uniquely qualified to provide in advance the timing
of changes in the direction of business activity in any market from
growth to recession to recovery and back to growth
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