economic indicators and business discussion on what cos. look in economic statistics…
TRANSCRIPT
Economic Indicators and Business
Discussion on what cos. Look in economic statistics…
Economic Indicator
• Variables/Indices sending signals on economies performance..
Types: • Leading indicators consistently turn before the
economy does. • Coincident indicators turn in step with the economy
and track the business cycle's progress.• Lagging indicators turn after the economy turns, and
play a confirming role.
Examples:
• Leading indicators: Bond price to predict stock market trend..
• Coincident indicators: personal income changes same as total GDP
• Lagging indicators: unemployment rate confirms economic up or down turn..
The genus of leading indicators..
• In 1950, Moore built on his mentors' findings to develop the first leading indicators of both revival and recession.
• In the 1960s he developed the original index of leading economic indicators (LEI).
• It is a testament to the quality of that breakthrough that, nearly half a century later, many still believe the LEI and its variants to be the best tools for cycle forecasting.
India – Key Economic Indicators2012 vs. 2001
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2012 2001Population 1.22 bn 1.03 bnGDP (at current prices) US $ 1,800 bn US $ 492 bnPer capita income (nominal) US $ 1,480 US $ 460
Exports - Merchandise US $ 305 bn US $ 44.5bnImports - Merchandise US $ 489 bn US $ 50.5 bnShare in world trade (exports + imports) 4.2% 1.5%
Export - Services US $ 142 bn US $ 16.3bn
Import – Services US $ 78 bn US $ 14.6bn
Foreign Currency Reserves US $ 295bn US $ 39.5 bn
External Debt US $ 376 bn US$ 99.6 bn
Average exchange rate / US$ 54.5 47.7
Use of Economic indicators in strategic business plans
• This collaborative research project between Financial Executives Research Foundation (FERF) and Merrill DataSite explored the.
• The research looked at:• the issue from both a qualitative and quantitative perspective. • On the qualitative side, senior level financial executives were
surveyed using a 15-question online survey instrument. • In-depth telephone interviews were conducted with 19 senior
financial executives. • These interviews consisted of nine open-ended questions and
were completed during July and August 2011.
Some of the key survey findings included the following:
The four most widely followed indicators are inflation (57%), the unemployment rate
(54%), oil prices (39%), and GDP (32%).
The two most cited purposes for using economic indicators are budgeting/forecasting
(83%) and strategic planning (71%).
57% of respondents currently have open positions they are looking to fill.
Key interview findings were:
• Inflation, the unemployment rate and GDP are good general economic indicators buteach company should follow those indicators that are the best predictors for theirbusiness and/or specific industry.
• Even though the unemployment rate remains high, finding qualified candidates withthe needed specific job skill sets has proven difficult.
• Both business and the general public have lost confidence in the ability of thegovernment to make the difficult and unpopular decisions needed to move the economy and country forward.
• Economic Indicators are tools that can be used in the business planning/decisionmakingprocess but they should not be a company’s only tools.
Survey takeaways:
• The four most widely followed indicators are inflation (57%), the unemployment rate
• (54%), oil prices (39%), and GDP (32%).• The two most-cited purposes for using
economic indicators are budgeting/forecasting• (83%) and strategic planning (71%).• 57% of respondents currently have open
positions they are looking to fill.
Lets find some economic indicators:
• Go to dbie.rbi.org.in• What is the trend of employment in rural and urban area
and for both combined under broad categories of employment (primary, secondary, tertiary)
• The BPL category is 22% in India. What are the top 5 states and UTs having highest and lowest BPL% of population and how much.
• Throw light on number of educational institutes and their growth in Indian economy.
• What is the trend of major food and non food items production in India. What are the popular ones.
Go to: http://drshradhabanga.jimdo.com/
• Download macro economics data• Download components of gross domestic
product
Find trend of :GDP, NDP at fc and mp, GDP, GNPAgriculture, industry, service sector
contribution..