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Monitoring of business climate, economic sentiment and digital activity in the Russian economy

Priority areas of development: economics
The project has been carried out as part of the HSE Program of Fundamental Studies.

Goal of research

The comprehensive goal of all longitudinal research of the Centre for Business Tendency Studies is:

  • Development of the framework for economic dynamics decomposition, dating and analysis of business cycles based on empirical results that aggregate leading entrepreneurial opinions with the help of modern methods of multivariate analysis and statistical computing;
  • Updating the methodological and analytical support of the integrated system of sectoral business tendency monitoring, harmonized with international standards, national practice of statistical accounting and economic analysis;
  • Implementation of research results in the practice of state statistical observation and economic measurements;
  • Updating the system of indicators that reflect with high statistical significance cyclic profiles in the dynamics of reference quantitative statistics, as well as current industry events of a structural and institutional nature;
  • Integration of information from national business tendency surveys into international databases of digital analogues.

The key research objective in 2019 is to develop methodological, analytical and visual tools for business tendency monitoring aimed at obtaining missing prompt information that reflects, in particular:

  • The impact of economic agents sentiment, their opinions on challenges, risks and constraints of economic activity, the uncertainty of their intentions and expectations, short- and medium-term cycles in entrepreneurial confidence on the intensity of aggregate economic growth;
  • Clusters of technological and investment activity, diversification and sustainability of sectoral growth, the performance of domestic markets, inflation expectations, demand and cost-saving behavior of consumers;
  • Sectoral effects of the digitalization of economic activity, the use of information technology in enterprises.


The methodology of the CBTS business tendency monitoring is in line with international recommendations, the best national practices of economic analysis and has been tested taking into account the specifics of the Russian economy. To analyze the monitoring  results, the fundamentals of mathematical statistics are applied: decomposition of the cyclic indicators dynamics; factor and cluster analysis for constructing composite indicators; rolling cross-correlation analysis to assess the relationship of qualitative and quantitative statistics; VAR modeling to identify the consistency and direction of time series interactions and the impulse response function to interpret simulation results.

Empirical base of research

In 2019, the total coverage of a stratified sample for regular sectoral monitoring amounted to about 53 thousand observation units (48 thousand heads of industrial, construction, retail, wholesale, and services organizations as well as 5 thousand people) in all Russian regions. All opinions, assessments, expectations and intentions of economic agents revealed during the surveys conducted by the Federal State Statistics Service (monthly and quarterly) substantially supplemented the empirical base of CBTS research, structured according to the surveys questions and reflecting economic and consumer sentiment for last 20 years.

The total sample of pilot surveys amounted to about 3,400 organizations, including more than 1,100 manufacturing organizations, more than 700 retail organizations, more than 600 ICT organizations, more than 950 investment-active large and medium-sized industrial enterprises.

Results of research

Among the main areas of research, it is worth to highlight the development, regular publication and updating in 2019 of the Economic Sentiment Indicator (ESI), which summarizes the survey results in the real economy (industry, construction, retail and wholesale trade), services and consumer sectors. The updated composite indicator corresponds to the dynamics of GDP growth with a high synchronous cross-correlation, technically ahead of the release of this reference quantitative statistics. These ESI properties make it possible to use the composite indicator that generalize entrepreneurial opinions as the first predictive estimates of economic growth. This is essential under the hypothesis of a “new modesty” of long-term development, when the steady sluggish dynamism, mainly below potential, eliminates weak short-term growth drivers, limiting their ability in GDP nowcasting.

In this regard, the important practical results of the research are associated with testing the ESI performance and its sensitivity in indicating the short-term cyclic movement of the GDP growth. The developed algorithm for the joint decomposition of both indicators time series allows us to identify long-term and short-term cyclic components with a smoothed amplitude in their dynamics. The results of all calculations confirm the ESI robustness and high cyclic sensitivity for use as an indicator that confirms the phase change in business cycles.

The results of experimental calculations of the new business climate index (BCI) in Russian manufacturing, including its estimates for medium- and high-tech (MHT) industries, showed that the BCI and BCI-MHT dynamics confirm quantitative changes in the industrial production growth more accurately and with a lead compared to the traditional confidence indicator. The BCI decomposition visualizes the direction, amplitude and turning points in the short-term cyclical development of the indicator, reflecting all the significant waves of optimism and pessimism of Russian manufacturers. It can be concluded that during the last longest cyclic recession, the sentiment of producers of MHT products was much less pessimistic compared with the sentiment of all manufacturers. Both business climate measures are significantly ahead of reference quantitative statistics (industrial production index) when the levels of their time series approach the upper values of the expansion phases, and are lagged relative to the crisis dates.

The developed composite indicators of business climate in services and conjuncture in small business allow extracting the “common factor” from a large volume of output survey data, separated from specific fluctuations in their time series. These indices demonstrate high efficiency to use in the predictive analysis of the national economic growth.

Along with the empirical results, the study provides an extensive review of economic theories, schools and methods for measuring business cycles, from their origins to contemporary approaches, taking into consideration the integration of business tendency surveys into the system of cyclic analysis.

The result of the next stage of the study is to identify how the surveys signals in the EU and Russia are consistent with constraints in industrial development and how this affected the business confidence of manufacturers; long-term averaged dependencies in the dynamics of the considered indicators are revealed. Specifically, the industry potential of orders expands with approximately the same amplitude of fluctuations as the intensity of capacity utilisation. The volatility of entrepreneurial confidence was largely associated with the assessments of competitive position and the share of sales in the domestic market. The participation of Russian industries in international value chains is developed more steadily, responds to the cyclical development of aggregate confidence in manufacturing industries with a considerable delay and is less dependent on real-time entrepreneurial sentiment.

In the field of organizing the digital economy monitoring in line with international standards and the national digital agenda, the criteria for measuring the sectoral digital environment, the requirements for sampling and the system of indicators have been refined; pilot surveys have been conducted. An integrated methodological approach allows measuring the “digital footprint” for all positions of business climate and economic sentiment in various sectors of the economy. An important result is the creation of a comprehensive integrated system of simple and composite measures of digital activity of large, medium and small industrial businesses according to their technological level and investment activity, as well as in trade and ICT services. The results reveal that the level of immersion of manufacturing enterprises in digitalization processes is not so deep, although progress is obvious. Investments in digital technologies and the results of production activity contribute to increasing growth in the level of digitalization and integration in large and medium-sized manufacturing enterprises. Intelligent robotic systems and industrial analytics technologies are most widely used in the MHT segment, while 3D printing and RFID tags are represented at different distribution levels in more industries, which may indicate the active dynamics of their implementation and development in the Russian manufacturing.

The study results aimed at studying the specifics of digital transformation not only based on aggregated indicators, but also at the level of individual assessments, are of particular interest for expanding research practices. An analysis of the respondents' detailed answers helps solve the problem of losing valuable information (the opinions of all survey participants), which is especially important when measuring such a complex and rapidly changing process as digitalization. Such “micro-level” information content, presented in the form of disaggregated survey results, has advanced analytical capabilities for measuring and interpreting the level of influence of such important parameters of business activity as production, investment and labor aspects, which often determine the spread of technology. In this regard, the measurement of the level of digital activity of manufacturing enterprises under the influence of “classical” factors, such as demand, capacity utilization, production volume, profit, etc., is essential for better understanding various aspects related to the implementation of digital technology.

The information technology (IT) industry, as a key driver of digital transformations in Russia, remains the focus of the research. The pilot survey program for organizations providing IT services has been updated and extended by adding a block of digitalization questions. As a result, new trends have been revealed and the traditional analytical interpretation of poorly understood phenomena in the field of digital progress of IT companies has been expanded.

Given the increasing digital effects on the business model and the problem of timely and reliable measuring technological transfers, the study identified the presence and strength of the relationship between the economic and technological development of the IT segment and the digitalization of retail. The study focused on measuring the localized industry effects of technology transfer from the IT segment to retail trade, which allows us to detail the technological transformation in Russia. The several hypotheses of retail trade sensibility to emerging trends in IT sector, its ability to respond quickly and efficiently to the growth of digital activity of IT by increasing investments in digital technologies and the intensity of their use, were tested. The results confirmed most of these hypotheses, which highlights the importance of further studying cross-sectoral effects of digitalization. In particular, the key cross-sectoral parameters of business and digital activity, which determine the specifics of spreading technological trends in trade, are revealed. One of the most important results is the close relationship between the business climate of IT companies and changes in e-commerce market: the growth of business activity in the IT sector is an essential factor in increasing the e-commerce turnover in retail organizations.

Level of implementation, recommendations on implementation or outcomes of the implementation of the results

As a result of collaboration of the Federal Statistics Service of the Russian Federation, the Higher School of Economics and the OECD, the seven-year implementation of the program for integrating the main CBTS monitoring results into the OECD database “Main Economic Indicators” has continued in 2019. The regularly transferring time series are derived from the following surveys: manufacturing (monthly results with a sample of about 4 thousand organizations); construction (quarterly – more than 6 thousand organizations); retail trade (quarterly – more than 4 thousand organizations); service sector (quarterly – about 6 thousand organizations).

The total output of CBTS information and analytical materials, including the results of regular and pilot monitoring, amounted to more than 1500 pages, including 17 research and review papers published and accepted in print in Russian and foreign peer-reviewed scientific journals and the series of HSE preprints.

Information and analytical materials on the monitoring results are available online on the HSE information portal; they are regularly submitted to the Federal legislative and executive authorities, published in the media and online, discussed on federal TV channels, radio channels (about 3 thousand references to the research in 2019).

Analytical monitoring results were presented at international workshops. The paper “The digital activity of Russian enterprises: the first results of pilot survey” was presented at the 9th joint OECD/EC workshop on Recent Development in Business and Consumer Surveys; the paper “Business Climate Indicator in manufacturing, medium- and high-tech industries in Russia” – at the poster session of the CIRET/KOF/OECD/INSEE workshop with a special focus on the use of economic tendency surveys to assess potential growth and the position of economies in the business cycle (the workshops were held in Boulogne-Billancourt, France on November 13-15, 2019).


Lola I. S., Bakeev M., Manukov A. EFFECTS OF INFLUENCE OF ECONOMIC AND TECHNOLOGICAL DEVELOPMENT OF IT SEGMENTS ON DIGITAL TRANSFORMATION OF RETAIL TRADE / NRU Higher School of Economics. Series WP BRP "Science, Technology and Innovation". 2019. No. WP BRP 102/STI/2019.
Lola I. S., Bakeev M. DIGITAL TRANSFORMATION IN MANUFACTURING: DRIVERS, BARRIERS, AND BENEFITS / NRU Higher School of Economics. Series WP BRP "Science, Technology and Innovation". 2020. No. 107/STI/2020.
Lola I. S., Bakeev M. Measurement Of Digital Activity In Medium, High-Tech And Low-Tech Manufacturing Industries / NRU HSE. Series SCIENCE, TECHNOLOGY, INNOVATION "SCIENCE, TECHNOLOGY, INNOVATION". 2019. No. WP BRP 95/STI/2019.
Liudmila Kitrar, Tamara Lipkind, Georgy Ostapkovich. Information Contetnt of the Russian Services Surveys / NRU Higher School of Economics. Series WP BRP "Science, Technology and Innovation". 2019. No. 93/STI/2019.
Liudmila Kitrar, Tamara Lipkind. Business Climate Indicator in Manufacturing, Medium- and High-Tech Industries in Russia / NRU HSE. Series SCIENCE, TECHNOLOGY, INNOVATION "SCIENCE, TECHNOLOGY, INNOVATION". 2019. No. 96/STI/2019.
Лола И. С., Бакеев М. Б. Оценка уровня цифровой активности организаций розничной торговли России // Вестник Московского университета. Серия 6: Экономика. 2020. № №2. С. 161-180.