Improving methodological support for the monitoring of processes in specific branches remains important to the development of the national information infrastructure. Isolation from the entire array of unstructured economic information of qualitative data for further processing, aggregation, and integration in the economic analysis and forecasting can significantly extend the capabilities of the operational statistical observation.
Stronger motivation for enterpeneurs, manufacturing and consumer sentiment and expectations, especially in the context of pronounced cyclical socioeconomic dynamics, the inadequacy of purely statistical quantitative monitoring of the short-term changes in the economic activity and business climate in various sectors of the economy require wider use of the views of economic agents to reveal the environment and possible changes in specific branches.
The relevance of qualitative information in the models of short-term sectoral development is due, primarily, to the fact that entrepreneurs, in contrast to traditional quantitative statistics, formulate their responses taking into account all factors affecting the performance of their businesses, including adopted and proposed legislation, tariff and pricing policy, global and national economic conditions, etc.
Therefore, developing, updating, and implementing statistical monitoring and economic analysis of a unified comprehensive system of short-term surveys of business climate in various sectors of the Russian economy, methodologically harmonized with the practice of business tendency surveys (BTS) in various countries around the world, is the main aim of this study.
The information base is the data of regular and pilot business climate surveys in the real economy and in the services. These surveys can reveal the opinions of business leaders on various aspects of activity, their attitudes and expectations, and factors that have both positive and negative effects on the intensity of the ongoing economic processes.
Currently, the business climate surveys of manufacturing, construction, wholesale and retail trade, leasing and investment activity (approx. 30,000 entities surveyed in total) are conducted as a regular monitoring program. At the same time, in 2011, pilot business climate surveys of the services were undertaken (approx. 4,500 entities surveyed).
The business tendency survey methodology is based on the international practice of business climate study with regard to the specifics of the functioning of the Russian economy. It was designed and is continuously updated using the scientific and practical resources of IFO Institute (Germany), KOF ETH (Switzerland), ISAE (Italy), CIRET (Centre for International Research of Economic Tendency Surveys), OECD, and European Commission.
Fundamentals of mathematical statistics, specifically the statistical analysis of nonparametric data, are employed as the methods of analysis of the survey findings.
Methods that have been designed to manipulate qualitative data are aimed primarily at obtaining objective information on the sectoral economic developments and to ensure comparability of the quantitative and qualitative statistics, both nationally and globally.
However, the collection of the assessments by the business community of the actual and future business trends, and presentation on this basis of the short-term dynamics of certain sectors of the economy is only part of the application of the qualitative indicators of the business climate in the study of the climate in specific sectors. Today, the most pressing problem is the development of composite indicators and predictive models based on them allowing to characterize comprehensively and reliably the business climate in various sectors and in the economy as a whole, and trends of change in the near future. In addition, it is reasonable to carry out a joint assessment of the cycles of the economic growth, using both the quantitative statistics and the qualitative data of business tendency surveys.
Therefore, the current research focus on the development and introduction into economic modeling and forecasting in Russia of an integrated system of sectorial surveys of business climate is the design of the National Corpus of composite indicators of economic development, including leading indicators.
The combination of qualitative and quantitative information in a single model and the calculation of the corresponding composite indicators of the business climate, including leading, require the design and application of appropriate procedures and algorithms, as well as ensuring comparability of the quantitative and qualitative data, including comparability with the information from other countries and international organizations.
The study has expanded opportunities for the methodological support of the business tendency monitoring in all phases of qualitative data generation, taking into account the standards and specifications recommended by international organizations. This applies, above all, to the methodology of forming observation panels (sampling frames), updating principles, frequency of surveys, dealing with the completeness, accuracy, and stability of the primary data issues, methodology of weighting the data, calculating simple and composite business climate indicators that can reflect the cyclical nature of existing and expected business trends.
In addition, the study presents the following activities:
- existing methods of use of the nonquantitative information in the macroeconomic analysis and short-term forecasting in terms of measuring the short-term fluctuations in the dynamics of sectorial processes have been presented
- conceptual, measurement, and forecasting aspects of the cyclical economic performance indicators have been identified
- key design phases and principal uses of composite indicators that characterize the business trends in general have been identified
- methods of calculating the sectorial composite Business Climate Indicator and the Economic Sentiment Index (the HSE Index) summarizing the findings of business tendency surveys in the dominant sectors of national economy have been developed and tested.
In addition to this, an experimental analysis of the prognostic capabilities of the Economic Sentiment Index (the HSE Index) has been undertaken using a regression model of the physical volume of the GDP as the reference quantitative series. The calculations have revealed a high (over 0.8) cross-correlation between the index dynamics and the dynamics of the gross domestic product, with a one quarter lead.
This study also presents the following key areas of business tendency surveys as exemplified by the service enterprises:
- adaptation of the qualitative and quantitative information on short-term business trends
- ensuring their comparability and compatibility with the appropriate conceptual basis of economic analysis to expand the functionality of the sectorial modeling and forecasting
- ensuring comparability of the qualitative information with the information on business trends in other countries, including the euro zone
- processing and analysis of the findings of the pilot survey of the service enterprises, preparation of relevant information materials
- developing the basic methodological, technical, and organizational aspects for the implementation of the service industry surveys in the statistical practice
- updating databases on the basis of the findings of the pilot and regular business tendency surveys in different sectors of the Russian economy, including the service industry.
The main task in this regard remains the updating of the methodological, process, and analytical aspects of the nonquantitative observations of the dynamics of the short-term sectorial changes and of the service organizations economic condition according to the modern international standards, as well as the long-term development program for the national statistics and socioeconomic monitoring. This allows us, in conjunction with similar surveys in the real sector, to continue the design of the composite indicators system capable of identifying most of the sectorial and business trends in the country.
The total volume of the output information and analytical materials, including the data from the regular monitoring of the real sector, prepared within the framework of this study is approximately 800 pages of analytical text, tables, graphs, and charts. The materials were published regularly in the national mass media (Kommersant, Vedomosti, Rossiyskaya gazeta, RBK, Moskovskiye novosti, Novaya gazeta, etc.), regional newspapers, and online. Also, roughly 10 articles based on the research material were published in the Russian sectorial economic journals. All analytical materials are available on the HSE official website.
On the basis of the methodological, technical, and organizational findings of the research, the Federal State Statistics Service decided to implement in the statistical practice a standardized business climate survey in the service industry. Regular surveys of the business climate in the Russian service industry are included in the 2012 Federal Program of statistical studies, which confirms the utility of the research undertaken.
Thus, this study presents the required complex of methodological and practical activities designed to expand the analytical and informational functionality of the economic monitoring based on short-term qualitative indicators, making it possible to include them in the National Corpus of composite indicators, capable of comprehensively identifying the dominant development and the expected changes in the different sectors and economy as whole.